UNITECH — Annual Report 2020

Nov 10, 2020

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Stock Code:2367

Unitech Printed Circuit Board Corporation and Subsidiaries

Consolidated Financial Statements

With Independent Auditors’ Report For the Years Ended December 31, 2020 and 2019

Address: No. 3, Lane 4, Zhongshan Road, Tucheng District, New Taipei City Telephone: (02)2268-5071

The independent auditors’ report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and consolidated financial statements, the Chinese version shall prevail.

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Table of contents

Contents 1. Cover Page 2. Table of Contents 3. Representation Letter 4. Independent Auditors’ Report 5. Consolidated Balance Sheets 6. Consolidated Statements of Comprehensive Income 7. Consolidated Statements of Changes in Equity 8. Consolidated Statements of Cash Flows 9. Notes to the Consolidated Financial Statements (1) Company history (2) Approval date and procedures of the consolidated financial statements (3) New standards, amendments and interpretations adopted (4) Summary of significant accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Pledged assets (9) Significant commitments and contingencies (10) Losses Due to Major Disasters (11) Subsequent Events (12) Other (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in mainland China (d) Major shareholders (14) Segment information

Page

1 2 3 4 5 6 7 8 9 9 9～11 11～29 29～30 30～66 67～68 69 69～70 70 70 70 71～74 74 75 75 76～77

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Representation Letter

The entities that are required to be included in the combined financial statements of Unitech Printed Circuit Board Corporation as of and for the year ended December 31, 2020 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standards No. 10 endorsed by the Financial Supervisory Commission, "Consolidated Financial Statements." In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Unitech Printed Circuit Board Corporation and Subsidiaries do not prepare a separate set of combined financial statements.

Company name: Unitech Printed Circuit Board Corporation Chairman: CHANG, YUAN-MING Date: March 30, 2021

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KPMG

台北市110615信義路5段7號68樓(台北101大樓) Telephone 電話 + 886 2 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, Fax 傳真 + 886 2 8101 6667 Xinyi Road, Taipei City 110615, Taiwan (R.O.C.) Internet 網址 home.kpmg/tw

Independent Auditors’ Report

To the Board of Directors of Unitech Printed Circuit Board Corporation:

Opinion

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

In our opinion, based on our audits and the report of other auditors (please refer to Other Matter paragraph), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“ IFRSs” ), International Accounting Standards (“ IASs” ), Interpretations developed by the International Financial Reporting Interpretations Committee (“ IFRIC” ) or the former Standing Interpretations Committee (“SIC”) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

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

Key Audit Matters

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

1. Impairment assessment on non-financial assets

Please refer to note 4(m) “Summary of Significant Accounting Policies- Impairment of non-financial assets”, Note 5 (a) “ Major Sources of Accounting Judgements, Estimations and Assumptions of UncertaintyImpairment Assessment on non-financial Assets”, and note 6 (h), (i) and (j) “Description of Estimation of impairment of non-financial assets”.

KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

4-1

Description of key audit matter:

The Group’s overall operation was affected by the epidemic, resulting in a risk which the impairment loss of non-financial assets and the recoverable amount of assets may be lower than the carrying value of assets. The valuation of the impairment loss of assets that are based on the cash flow in the future is subject to the management’s judgement. As a result, we need to evaluate the adequacy of the valuation. Therefore, the impairment assessment on non-financial assets is one of the key audit matters for our audit.

How the matter was addressed in our audit:

Our principal audit procedures included：Assessing the methodology and assumption used by management to determine whether the assets are impaired. Conducting retrospective testing to compare the historical forecast cash flows with actualities to find out if there is the significant difference. Performing sensitivity analysis for the key assumptions which are used in the impairment model with reference to historical forecast cash flows. Consulting with our internal valuation specialist to evaluate the appropriateness of the weighted average cost of capital applied.

2. Valuation of Inventories

Please refer to note 4 (h) “Summary of Accounting Policies- Inventories”, note 5 (b) “Major Sources of Accounting Judgements, Estimations and Assumptions of Uncertainty- Valuation of inventories”, and note 6 (e) “Situation of allocate the impairment of inventories”.

Description of key audit matter:

Inventories are measured by the lower of cost and net realizable value accounting. Due to the rapid change of terminal product market, the clients’ intention about placing and changing orders for products could be affected. Furthermore, the rapid change also resulted in a risk in which the carrying value of inventories may be higher than its net realizable value, and caused the obsolete stock. Therefore, the valuation of inventories is one of the key audit matters for our audit.

How the matter was addressed in our audit:

Our principal audit procedures included: Evaluating the rationality of the policy of making provision to inventories impairment, evaluating the assumption of allowance for inventory valuation of the authorities, and the situation of obsolescence of inventory that has happened in prior periods; confirming whether the Group has undertaken the inventory valuation based on the policy; inspecting the inventory aging report and analyzing the difference in the inventory aging in comparison to prior periods. Understanding and evaluating the management' s judgment on the calculation of the net realizable value; testing the appropriateness of the inventory valuation, evaluating the management's calculations of allowance for inventory loss to ensure their appropriateness and considering the adequacy of the Company's disclosures in allowance for inventory valuation.

Other Matter

Part of the financial statements of subsidiaries that are included in the consolidated financial statements which were audited by other auditors. Our opinion, insofar as it relates to the Group’s part of subsidiaries are based solely on the report of other auditors. As of December 31, 2020 and 2019, the total assets of subsidiaries which constituted 4.69% and 5.69% of the Group’ s consolidated total assets, respectively. For the years ended December 31, 2020 and 2019, the net sales of subsidiaries which constituted 0.00% and 1.64% of the Group’s consolidated net sales.

4-2

The Group’s investee company was accounted for by using the equity method based on its financial statements which was audited by other auditors. Our opinion, insofar as it relates to the Group’s investee company is based solely on the report of other auditors. As of December 31, 2020 and 2019, the total assets of investee company which constituted 4.18% and 4.07% of the Group’s consolidated total assets, respectively. For the years ended December 31, 2020 and 2019, the profit or loss of affiliated companies accounted for by using the equity method which constituted 4.12% and (0.80)% of the income which the Group recognized before income tax, respectively.

We have also audited the parent company only financial statements of Unitech Printed Circuit Board Crop. as of and for the years ended December 31, 2020 and 2019, on which we have issued an unmodified opinion.

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

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

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

Those charged with governance (including the Audit Committee or supervisors) are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4-3

1. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

2. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

3. Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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

The engagement partners on the audit resulting in this independent auditors’ report are Chuang Chun Wei and Wang Chin Sun.

KPMG

Taipei, Taiwan (Republic of China) March 30, 2021

Notes to Readers

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

The auditors’ report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language auditors’ report and consolidated financial statements, the Chinese version shall prevail.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Unitech Printed Circuit Board Corporation and Subsidiaries

Consolidated Balance Sheets

December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollar)

Assets Current assets: 1100 Cash and cash equivalents (note 6(a) and (g)) 1150 Notes receivable, net (note 6(c) and (g)) 1170 Accounts receivable, net (note 6(c) and (g)) 1200 Other receivables, net (note 6(d) and (g)) 1210 Other receivables-related parties, net (note 7) 1220 Current tax assets 1310 Inventories (note 6(e) and (g)) 1410 Prepayments (note 9) 1476 Other financial assets-current (note 8) 1479 Other current assets, others (note 6(g) and (k)) Total current assets Non-current assets: 1517 Financial assets at fair value through other comprehensive income non- current (note 6(b) and (g)) 1550 Investments accounted for using equity method, net (note 6(f) and 8) 1600 Property, plant and equipment (note 6(g), (h), 8 and 9) 1755 Right-of-use assets (note 6(i) and 8) 1780 Intangible assets (note 6(j)) 1840 Deferred tax assets (note 6(g) and (p)) 1915 Prepayments for business facilities (note 9) 1920 Refundable deposits (note 8) 1990 Other non-current assets, others (note 6(g)) Total non-current assets	December 31, 2020 Amount % $ 1,065,212 4 5,922 - 4,002,735 17 428,160 2 571 - 4,373 - 1,957,815 8 132,085 1 52,170 - 14,372 - 7,663,415 32 609,040 3 995,638 4 13,277,793 56 658,291 3 108,442 - 175,451 1 239,085 1 66,920 - 40,222 - 16,170,882 68	December 31, 2019
		Amount % 1,236,698 5 7,662 - 5,229,145 21 308,965 1 765 - - - 2,282,244 9 129,239 1 52,498 - 23,295 - 9,270,511 37 482,074 2 1,018,374 4 12,904,244 52 746,000 3 36,371 - 77,456 - 381,088 2 70,579 - 26,513 - 15,742,699 63

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$ 23,834,297 100 25,013,210 100
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Total assets
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Liabilities and Equity Current liabilities: 2101 Short-term notes and bills payable (note 6(k)) 2100 Short-term borrowings (note 6(g), (l), and 8) 2151 Notes payable (note 6(g)) 2170 Accounts payable (note 6(g)) 2200 Other payables (note 6(g)) 2230 Current tax liabilities 2280 Current, Lease liabilities (note 6(n)) 2322 Current portion of long-term borrowings (note 6(g), (m) and 8) 2399 Other current liabilities (note 6(g) and (h)) Total current liabilities Non-Current liabilities: 2540 Long-term borrowings (note 6(g), (m) and 8) 2570 Deferred tax liabilities (note 6(g) and (p)) 2580 Non current lease liabilities (note 6(n)) 2640 Net defined benefit liability, non-current (note 6(g) and (o)) 2670 Other non-current liabilities, other (note 6(g) and (h)) Total non-current liabilities Total liabilities Equity (note 6(q)): 3110 Ordinary share 3200 Capital surplus Retained earnings: 3310 Legal reserve 3320 Special reserve 3350 Unappropriated earnings Total retained earnings Other equity: 3410 Exchange differences on translation of foreign financial statements 3420 Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income 3445 Gains (losses) on remeasurements of defined benefit 3491 Other equity, the unearned remuneration of employees Total other equity Total equity attributable to owners of parent: 3600 Non-controlling interest Total equity Total liabilities and equity	December 31, 2020		December 31, 2019 Amount % - - 1,448,687 6 1,856 - 3,054,768 12 1,546,972 6 327,639 2 97,444 - 1,298,493 5 34,105 - 7,809,964 31 4,026,744 16 285,983 1 457,680 2 308,925 1 788,262 3 5,867,594 23 13,677,558 54 6,194,072 25 2,831,974 11 133,076 1 157,021 1 2,180,933 9 2,471,030 11 (37,583) - 53,103 - (189,847) (1) (7,543) - (181,870) (1) 11,315,206 46 20,446 - 11,335,652 46 25,013,210 100
	Amount %
	$ 69,991 - 919,996 4 - - 3,037,371 13 1,444,897 6 - - 99,462 - 1,438,954 6 749,648 3 7,760,319 32 5,605,779 24 176,350 1 407,326 2 212,723 1 - - 6,402,178 28 14,162,497 60 6,194,072 26 2,843,140 12 306,606 1 174,327 1 64,399 - 545,332 2 41,694 - 232,996 1 (182,812) (1) (2,622) - 89,256 - 9,671,800 40 - - 9,671,800 40 $ 23,834,297 100

See accompanying notes to consolidated financial statements.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Unitech Printed Circuit Board Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollar , Except for Earnings Per Common Share)

4000 Operating revenue, net (note 6(s)) 5110 Cost of sales (note 6(e) and (o)) Gross profit (loss) from operations Operating expenses: 6100 Selling expenses and administrative expenses (note 6(o), (t) and 7) 6300 Research and development expenses 6450 Expected credit loss (gain) (note 6(c)) Total operating expenses Net operating income (loss) Non-operating income and expenses (note 6(f), (g), (u) and 7): 7100 Interest income 7010 Other income 7020 Other gains and losses, net 7050 Finance costs, net 7060 Share of profit (loss) of associates and joint ventures accounted for using equity method, net Total non-operating income and expenses Profit (loss) from continuing operations before tax 7950 Less: Income tax expenses (note 6(p)) Profit (loss) 8300 Other comprehensive income: 8310 Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8311 Gains (losses) on remeasurements of defined benefit plans 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income Items that may not be reclassified subsequently to profit or loss 8360 Components of other comprehensive income (loss) that will be reclassified to profit or loss 8361 Exchange differences (on translation of foreign financial statements) Items that may be reclassified subsequently to profit or loss 8300 Other comprehensive income, net of tax Total comprehensive income Profit (loss) attributable to: Owners of parent Non-controlling interests Comprehensive income (loss) attributable to: Owners of parent Non-controlling interests Basic earnings per share (NT dollars, note 6(r)) Diluted earnings per share (NT dollars, note 6(r))

See accompanying notes to consolidated financial statements.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Unitech Printed Circuit Board Corporation and Subsidiaries

Consolidated Statements of Changes in Equity

For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollar)

Balance at January 1, 2019 Profit for the year ended December 31, 2019 Other comprehensive income for the year ended December 31, 2019 Total comprehensive income Appropriation and distribution of retained earnings: Legal reserve Special reserve Cash dividends on ordinary share Changes in equity of associates and joint ventures accounted for using equity method Disposal of investments in equity instruments designated at fair value through other comprehensive income Balance at December 31, 2019 Profit for the year ended December 31, 2020 Comprehensive income for the year ended December 31, 2020 Total comprehensive income Appropriation and distribution of retained earnings: Legal reserve appropriated Special reserve appropriated Cash dividends of ordinary share Disposal of subsidiaries Changes in equity of associates and joint ventures accounted for using equity method Disposal of investments in equity instruments designated at fair value through other comprehensive income Balance at December 31, 2020								Equity attributab	Equity attributab	Equity attributab	l	e to owners of	parent	parent	parent	parent						Non- controlling interests	Total equity
	Ordinary shares			Capital surplus			R	etained earnings					Total other equity interest							Total equity attributable to owners of parent
						Legal reserve		Special reserve		Unappropriated retained earnings		Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income			Gains (losses) on remeasurements of defined benefit		The remuneration of employees
	$ 6,194,072 - - - - - - - - 6,194,072 - - - - - - - - - $ 6,194,072			2,822,047		67,411		-		947,066		76,548		(87,289) - 135,502 135,502 - - - - 4,891 53,104 - 182,380 182,380 - - - - - (2,488) 232,996		(129,827) - (60,020) (60,020) - - - - - (189,847) - 7,499 7,499 - - - (464) - - (182,812)		(16,453) - - - - - - 8,910 - (7,543) - - - - - - - 4,921 - (2,622)		9,873,575		25,369 (4,213) (710) (4,923) - - - - - 20,446 992 - 992 - - - (21,438) - - -	9,898,944
		- -		- -		- -		- -		1,735,300 -													1,731,087 (39,360)
		-		-		-		-		1,735,300													1,691,727
		- - - - -		- - - 9,927 -		65,665 - - - -		- 157,021 - - -															- - (247,763) (7,256) -
		6,194,072 - -				133,076 - -		157,021 - -															11,335,652 (1,435,460) 253,946
		-				-		-															(1,181,514)
		- - - - - -				173,530 - - - - -		- 17,306 - - - -															- - (495,526) (5,974) 19,162 -
		$ 6,194,072				306,606		174,327															9,671,800

See accompanying notes to consolidated financial statements.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Unitech Printed Circuit Board Corporation and Subsidiaries

Consolidated Statements of Cash Flows

For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollar)

Cash flows from operating activities: Profit (loss) before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Expected credit gain Interest expense Interest revenue Dividend revenue Share of loss (profit) of associates accounted for using equity method Loss on disposal of property, plan and equipment Gain on disposal of investments Loss on disposal of investments accounted for using equity method other items Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Notes receivable Accounts receivable Other receivable Other receivable-related parties Inventories Prepayments Other current assets Other current financial assets-current Notes payable Accounts payable Other payable Other payable- related parties Other current liabilities Net defined benefit liabilities Other non-current liabilities Total changes in operating assets and liabilities Total adjustments	2020 $ (1,583,127) 1,515,835 22,441 (1,758) 126,202 (5,841) (9,826) 65,212 460,231 (403) 25,137 727 2,197,957 952 1,184,580 (120,011) 194 301,547 (12,843) 8,042 227 (148) 13,348 (855,775) - 730,329 (72,377) (788,232) 389,833 2,587,790	2019 2,276,185 1,690,154 13,792 (4,464) 148,227 (11,017) (6,574) 18,127 59,211 - - - 1,907,456 (4,260) (361,351) (247,901) (101) (127,667) (20,711) 55,610 (16,639) (96) (1,045) 207,211 (3,135) 1,620 (7,455) 785,367 259,447 2,166,903

See accompanying notes to consolidated financial statements.

8-1

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Unitech Printed Circuit Board Corporation and Subsidiaries

Consolidated Statements of Cash Flows

For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollar)

Cash inflow generated from operations Interest received Dividend received Interest paid Income taxes paid Net cash flows from operating activities Cash flows from (used in) investing activities: Acquisition from financial assets at fair value through propit or loss Disposal of financial assets at fair value through profit or loss Acquisition from financial assets at fair value through other comprehensive income Disposal of financial assets at fair value through other comprehensive income Disposal of investments accounted for using equity method Acquisition of property, plant and equipment Disposal of property, plant and equipment Increase in refundable deposits Acquisition of intangible assets Decrease in other financial assets-non-current Decrease (increase) in other non-current assets Net cash flows from investing activities Cash flows from (used in) financing activities: Increase in short-term borrowings Decrease in short-term borrowings Increase in short-term notes and bills payable Increase from long-term borrowings Repayments of long-term borrowings Payment of lease liabilities Cash dividends paid Net cash flows from (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

See accompanying notes to consolidated financial statements.

9

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Unitech Printed Circuit Board Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollar, Unless Otherwise Specified)

(1) Company history

Unitech Printed Circuit Board Corporation (the “Company”) was incorporated on December 31, 1984, with registered address of No. 3, Lane 4, Zhongshan Road, Tucheng District, New Taipei City, Taiwan, as a company limited by shares under the Company Act of the Republic of China (R.O.C.). The major business activities of Unitech Printed Circuit Board Corporation and subsidiaries (the “ Consolidated Company”) are the design, manufacture and sale of PCB.

(2) Approval date and procedures of the consolidated financial statements:

These consolidated financial statements were authorized for issue by the Board of Directors on March 30, 2021.

(3) New standards, amendments and interpretations adopted:

• (a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. (“FSC”) which have already been adopted.

The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2020:

• ●Amendments to IFRS 3 “Definition of a Business”

• ●Amendments to IFRS 9, IAS39 and IFRS7 “Interest Rate Benchmark Reform”

• ●Amendments to IAS 1 and IAS 8 “Definition of Material”

• ●Amendments to IFRS 16 “COVID-19-Related Rent Concessions”

• (b) The impact of IFRS issued by the FSC but not yet effective

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2021, would not have a significant impact on its consolidated financial statements:

• ●Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”

• －

• ●Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform Phase 2”

(Continued)

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Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• (c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

The following new and amended standards, which may be relevant to the Group, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Standards or Interpretations 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”

Content of amendment Effective date per IASB The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of balance sheet, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. The amendments include clarifying the classification requirements for debt a company might settle by converting it into equity. January 1, 2023 The key amendments to IAS 1 include: ●requiring companies to disclose their material accounting policies rather than their significant accounting policies; ●clarifying that accounting policies related to immaterial transactions, other events or conditions are themselves immaterial and as such need not be disclosed; and ●clarifying that not all accounting policies that relate to material transactions, other events or conditions are themselves material to a company’ s financial statements. January 1, 2023 The amendments introduce a new definition for accounting estimates: clarifying that they are monetary amounts in the financial statements that are subject to measurement uncertainty. The amendments also clarify the relationship between accounting policies and accounting estimates by specifying that a company develops an accounting estimate to achieve the objective set out by an accounting policy. January 1, 2023

The Group is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its consolidated financial position and consolidated financial performance. The results thereof will be disclosed when the Group completes its evaluation.

(Continued)

11

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

The Group does not expect the following other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its consolidated financial statements:

• ●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” and amendments to IFRS 17 “ Insurance Contracts”

• －

• ●Amendments to IAS 16 “Property, Plant and Equipment Proceeds before Intended Use”

• －

• ●Amendments to IAS 37 “Onerous Contracts Cost of Fulfilling a Contract”

• ●Annual Improvements to IFRS Standards 2018-2020

• ●Amendments to IFRS 3 “Reference to the Conceptual Framework”

(4) Summary of significant accounting policies:

The significant accounting policies presented in the consolidated financial statements are summarized below. Except for those specifically indicated, the following accounting policies were applied consistently throughout the periods presented in the consolidated financial statements.

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “the Regulations” ) and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations endorsed and issued into effect by the Financial Supervisory Commission, R.O.C..

(b) Basis of preparation

• (i) Basis of measurement

Except for the following significant accounts, the consolidated financial statements have been prepared on a historical cost basis:

• 1) Financial instruments at fair value through profit or loss are measured at fair value;

• 2) Financial assets at fair value through other comprehensive income are measured at fair value;

• 3) The defined benefit liabilities(assets) are measured at fair value of the plan assets less the present value of the defined benefit obligation, limited as explained in note (4) (p).

• (ii) Functional and presentation currency

The functional currency of each Group entity is determined based on the primary economic environment in which the entity operates. The consolidated financial statements are presented in New Taiwan Dollar (NTD), which is the Company’ s functional currency. All financial information presented in NTD has been rounded to the nearest thousand.

(Continued)

12

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(c) Basis of consolidation

(i) Principles of preparation of the consolidated financial statements

The consolidated financial statements comprise the Company and subsidiaries. Subsidiaries are entities controlled by the Group. The Group ‘controls’ an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.Intragroup balances and transactions, and any unrealized income and expenses arising from Intragroup transactions are eliminated in preparing the consolidated financial statements. The Group attributes the profit or loss and each component of other comprehensive income to the owners of the parent and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.

The Group prepares consolidated financial statements using uniform accounting policies for like transactions and other events in similar circumstances.

Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the noncontrolling interests are adjusted and the fair value of the consideration paid or received will be recognized directly in equity, and the Group will attribute it to the owners of the parent.

When the Group loses control over a subsidiary, it derecognizes the assets (including any goodwill) and liabilities of the subsidiary, and any related non-controlling interests and other components of equity. Any interest retained in the former subsidiary is measured at fair value when control is lost, with the resulting gain or loss being recognized in profit or loss. The Grouprecognizes as gain or loss in profit or loss the difference between (i) the fair value of the consideration received as well as any investment retained in the former subsidiary at its fair value at the date when control is lost ;and (ii) the assets (including any goodwill), liabilities of the subsidiary as well as any related non-controlling interests at their carrying amounts at the date when control is lost, as gain or loss in profit or loss. When the Group loses control of its subsidiary, it accounts for all amounts previously recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required if it had directly disposed of the related assets or liabilities.

(ii) List of subsidiaries in the consolidated financial statements

Name of investor	Name of subsidiary	Principal activity	Shareholding December 31, 2020 December 31, 2019 Note	Shareholding December 31, 2020 December 31, 2019 Note
			December 31, 2020
The Company The Company The Company	Unitech Electronics International Limited (Unitech BVI) DA-TAI Investment Co., Ltd. Schmidt Scientific Taiwan Ltd.	Manufactureing of electronics General investing Sales of electronics	% 100.00 % 100.00 % -	% 100.00 - % 100.00 % 57.17 Note1 and 2

(Continued)

13

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Name of investor	Name of subsidiary	Principal activity	Shareholding December 31, 2020 December 31, 2019 Note	Shareholding December 31, 2020 December 31, 2019 Note
			December 31, 2020
The Company Unitech BVI Unitech HK Unitech HK Shanghai Unitech Electronics Co., Ltd. Schmidt Scientific Taiwan Ltd. STIL STI	Unitech Electronics International (HK) Limited (Unitech HK) Unitech Electronics International (HK) Limited (Unitech HK) Shanghai Unitech Electronics Co., Ltd. Shanghai Unitech Electronics (Nontong) Co., Ltd. Shanghai Unitech Electronics (Nontong) Co., Ltd. Schmidt Taiwan International Ltd. (STIL) Schmidt Technology Inc. (STI) Schmidt Scientific Shanghai Ltd.	General investing General investing Manufactureing of electronics Manufactureing of electronics Manufactureing of electronics Sales of electronics Sales of electronics Sales of electronics	% 6.10 % 93.90 % 100.00 % 10.00 % 90.00 - - -	% 6.10 - % 93.90 - % 100.00 - % 17.81 - % 82.19 - % 100.00 Note2 % 100.00 Note2 % 100.00 Note2

Note 1: The Group considers the company is not a significant subsidiary, the financial report did not audit from CPA.

Note 2: The Company considered Gruop’s strategic planning and has passed a resolution of the board of directors on December 24, 2019 to dispose all its shares at 3.96 per share on January 15, 2020. Therefore, the company lost of control and exclude from the consilidated subidiary, refer to Note 6(g) for details.

(iii) Subsidiaries excluded from the consolidated financial statements: None.

(d) Foreign currencies

• (i) Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Group entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

(Continued)

14

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Exchange differences are generally recognized in profit or loss, except for those differences relating to the following, which are recognized in other comprehensive income:

• 1) an investment in equity securities designated as at fair value through other comprehensive income;

• 2) a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or

• 3) qualifying cash flow hedges to the extent that the hedges are effective.

• (ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into the presentation currency at the average exchange rate. Exchange differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the consolidated disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, Exchange differences arising from such a monetary item that are considered to form part of the net investment in the foreign operation are recognized in other comprehensive income.

• (e) Classification of current and non-current assets and liabilities

An asset is classified as current under one of the following criteria, and all other assets are classified as non current.

• (i) It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;

• (ii) It is held primarily for the purpose of trading;

• (iii) It is expected to be realized within twelve months after the reporting period; or

• (iv) The asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non current.

(Continued)

15

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• (i) It is expected to be settled in the normal operating cycle;

• (ii) It is held primarily for the purpose of trading;

• (iii) It is due to be settled within twelve months after the reporting period; or

• (iv) The Group does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.

• (f) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits which meet the above definition and are held for the purpose of meeting short term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

Bank overdrafts that are repayable on demand and form an integral part of the Group’ s cash management are included as a component of cash and cash equivalents for the purpose of the consolidated statement of cash flows.

(g) Financial Instruments

Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Group becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

(i) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

On initial recognition, a financial asset is classified as measured at: amortized cost; Fair value through other comprehensive income (FVOCI) – debt investment; FVOCI – equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

• 1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

(Continued)

16

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

• 2) Fair value through other comprehensive income (FVOCI)

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL：

• it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income is recognized in profit or loss on the date on which the Group’s right to receive payment is established.

• 3)

• Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

(Continued)

17

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• 4) Business model assessment

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

• 5) Impairment of financial assets

The Group recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, notes and trade receivables, other receivables), debt investments measured at FVOCI and contract assets.

The Group measures loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL:

• debt securities that are determined to have low credit risk at the reporting date； and

• other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Group’s historical experience and informed credit assessment as well as forward-looking information.

The Group considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of ‘investment grade which is considered to be BBB- or higher per Standard & Poor’s, Baa3 or higher per Moody’s or twA or higher per Taiwan Ratings’.

The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 90 days past due.

The Group considers a financial asset to be in default when the financial asset is more than one year past due or the debtor is unlikely to pay its credit obligations to the Group in full.

ECL are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e the difference between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive). ECL are discounted at the effective interest rate of the financial asset.

(Continued)

18

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

At each reporting date, the Group assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘ creditimpaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data:

• significant financial difficulty of the borrower or issuer;

• a breach of contract such as a default or being more than 90 days past due;

• the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;

• it is probable that the borrower will enter bankruptcy or other financial reorganization；or

• the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is charge to profit or loss and is recognized in other comprehensive income instead of reducing the carrying amount of the asset.

The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Group individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

• 6) Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Group enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

(Continued)

19

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(ii) Financial liabilities and equity instruments

• 1) Classification of debt or equity

Debt and equity instruments issued by the Company are classified as financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

2) Equity instrument

An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

3) Treasury shares

When shares recognized as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is recognized in capital surplus or retained earnings (if the capital surplus is not sufficient to be written down).

4) Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

• 5) Derecognition of financial liabilities

The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

• 6) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(Continued)

20

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(h) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is calculated using the weighted average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their present location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(i) Investment in associates

Associates are those entities in which the Group has significant influence, but not control or joint control, over their financial and operating policies.

Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of the investment includes transaction costs. The carrying amount of the investment in associates includes goodwill arising from the acquisition less any accumulated impairment losses.

The consolidated financial statements include the Group’ s share of the profit or loss and other comprehensive income of those associates, after adjustments to align their accounting policies with those of the Group, from the date on which significant influence commences until the date on which significant influence ceases. The Group recognizes any changes of its proportionate share in the investee within capital surplus, when an associate’s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in actual proportionate share.

Gains and losses resulting from transactions between the Group and an associate are recognized only to the extent of unrelated Group’s interests in the associate.

When the Group’s share of losses of an associate equals or exceeds its interests in an associate, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

(j) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

(Continued)

21

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.

• (iii) Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

• 1) Buildings and constructions 3~55 years 2) Machinery equipment 3~12 years 3) Office equipment 3~5 years 4) Other equipment 3-5 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(k) Leases

• (i) Identifying a lease

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:

• 1) the contract involves the use of an identified asset – this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; and

• 2) the customer has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and

• 3) thehe customer has the right to direct the use of the asset throughout the period of use only if either:

• the customer has the right to operate the asset throughout the period of use, without the supplier having the right to change those operating instructions; or

(Continued)

22

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• the relevant decisions about how and for what purpose the asset is used are predetermined and:

• － the customer has the right to operate the asset throughout the period of use, without the supplier having the right to change those operating instructions; or

－ the customer designed the asset in a way that predetermines how and for what purpose it will be?used throughout the period of use.

• (ii) As a lessee

The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

• 1) fixed payments, including in-substance fixed payments;

• 2) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

• 3) amounts expected to be payable under a residual value guarantee; and

• 4) payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

• 1) there is a change in future lease payments arising from the change in an index or rate; or

• 2) there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee; or

• 3) there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset, or

(Continued)

23

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• 4) there is a change of its assessment on whether it will exercise a extension or termination option; or

• 5) there is any lease modification

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Group accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Group presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

The Group has elected not to recognize right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less and leases of low-value assets. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

For sale-and-leaseback transactions, the Group applies the requirements for determining when a performance obligation is satisfied in IFRS15 to determine whether the transfer of an asset is accounted for as a sale of the asset. If the transfer of an asset satisfies the requirement of IFRS15 to be accounted for as a sale of the asset, the Group derecognizes the transferred asset, then measures the right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the asset that relates to the right of use retained. Accordingly, the Group recognizes only the amount of any gain or loss that relates to the rights transferred to the buyer-lessor. For leaseback transaction, the Group applies the lessee accounting policy. If the transfer of an asset does not satisfy the requirement of IFRS15 to be accounted for as a sale of the asset, the Group continues to recognize the transferred asset and recognizes the financial liability equal to the transfer proceeds.

(iii) As a lessor

When the Group acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease.

(Continued)

24

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

If an arrangement contains lease and non-lease components, the Group applies IFRS15 to allocate the consideration in the contract.

The Group recognizes a finance lease receivable at an amount equal to its net investment in the lease. Initial direct costs, such as lessors to negotiate and arrange a lease, are included in the measurement of the net investment. The interest income is recognized over the lease term based on a pattern reflecting a constant periodic rate of return on the net investment in the lease. The Group recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘other income’.

(l) Intangible assets

(i) Recognition and measurement

Goodwill arising on the acquisition of subsidiaries is measured at cost, less accumulated impairment losses.

Expenditure on research activities is recognized in profit or loss as incurred.

Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Group intends to, and has sufficient resources to, complete development and to use or sell the asset. Otherwise, it is recognized in profit or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost, less accumulated amortization and any accumulated impairment losses.

Other intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.

(iii) Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use.

The estimated useful lives for current and comparative periods are as follows:

• 1) Computer software 5~10 years

Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(Continued)

25

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(m) Impairment of non-financial assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than inventories, contract assets, and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’ s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units (CGUs). Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(n) Revenue recognition

• (i) Revenue from contracts with customers

Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for transferring goods or services to a customer. The Group recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Group’s main types of revenue are explained below.

• Sale of goods

The Group design, manufacture and sale PCB. The Group recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Group has objective evidence that all criteria for acceptance have been satisfied.

(Continued)

26

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

A receivable is recognized when the goods are delivered as this is the point in time that the Group has a right to an amount of consideration that is unconditional.

• Financing components

The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the group does not adjust any of the transaction prices for the time value of money.

(ii) Contract costs

• Incremental costs of obtaining a contract

The Group recognizes as an asset the incremental costs of obtaining a contract with a customer if the Group expects to recover those costs. The incremental costs of obtaining a contract are those costs that the Group incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained shall be recognized as an expense when incurred, unless those costs are explicitly chargeable to the customer regardless of whether the contract is obtained.

The Group applies the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less.

• Costs to fulfil a contract

If the costs incurred in fulfilling a contract with a customer are not within the scope of another Standard (for example, IAS 2 Inventories, IAS 16 Property, Plant and Equipment or IAS 38 Intangible Assets), the Group recognizes an asset from the costs incurred to fulfil a contract only if those costs meet all of the following criteria:

• 1) the costs relate directly to a contract or to an anticipated contract that the Group can specifically identify;

• 2) the costs generate or enhance resources of the Group that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; and

• 3) the costs are expected to be recovered.

General and administrative costs, costs of wasted materials, labor or other resources to fulfil the contract that were not reflected in the price of the contract, costs that relate to satisfied performance obligations (or partially satisfied performance obligations), and costs for which the Group cannot distinguish whether the costs relate to unsatisfied performance obligations or to satisfied performance obligations(or partially satisfied performance obligations), the Group recognizes these costs as expenses when incurred.

(Continued)

27

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(o) Government grants and government assistance

The Group recognizes an unconditional government grant related to a biological asset in profit or loss as other income when the grant becomes receivable. Other Grants that compensate the Group for expenses or losses incurred are recognized in profit or loss on a systematic basis in the periods in which the expenses or losses are recognized.

(p) Employee benefits

• (i) Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

(ii) Defined benefit plans

The Group’s net obligation in respect of defined benefit plans is calculated separately for each the plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Group, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Group recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(iii) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(Continued)

28

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(q) Income taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are recognized except for the following:

• (i) Temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;

• (ii) Temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

• (iii) Taxable temporary differences arising on the initial recognition of goodwill.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date, and reflect uncertainty related to income taxes, if any.

Deferred tax assets and liabilities are offset if the following criteria are met:

• (i) the Group has a legally enforceable right to set off current tax assets against current tax liabilities; and

• (ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

• 1) the same taxable entity; or

• 2) different taxable entitie which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves.

(Continued)

29

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(r) Earnings per share

The Group discloses the Company’s basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares, such as employee compensation.

(s) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group). Operating results of the operating segment are regularly reviewed by the Group’s chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance. Each operating segment consists of standalone financial information.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

The preparation of the consolidated financial statements in conformity with the Regulations and the IFRSs endorsed by the FSC requires management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the following period.

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the consolidated financial statements is as follows:

(a) Judgement of whether the Group has substantive control over its investees

The Group holds 14.42% of the outstanding voting shares of Fulltech Fiber Glass Corp. and is the single largest shareholder of the investee. Although the remaining 85.58% of Fulltech Fiber Glass Corp.’s shares are not concentrated within specific shareholders, the Group still cannot obtain more than half of the total number of Fulltech Fiber Glass Corp.’s directors, and it also cannot obtain more than half of the voting rights at a shareholders’ meeting. Therefore, it is determined that the Group has significant influence on Fulltech Fiber Glass Corp.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is as follows. Those assumptions and estimation have been updated to reflect the impact of COVID-19 pandemic:

(Continued)

30

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(a) Valuation of inventories

Since inventory must be measured at the lower of cost and net realizable value, the combined company assesses the amount of inventory due to normal wear and tear, obsolescence, or no market sales value on the reporting date, and offsets the inventory cost to net realizable value. This inventory evaluation is mainly based on the estimated product demand in a specific period in the future, so there may be major changes due to rapid changes in the industry. Please refer to note 6 (e) for detailed inventory evaluation and estimation.

• (b) Impairment of property, plant and equipment, and intangible assets

In the process of evaluating the potential impairment of tangible and intangible assets other than goodwill, the Group is required to make subjective judgments in determining the independent cash flows, useful lives, expected future income and expenses related to the specific asset groups considering of the nature of the industry. Any changes in these estimates based on changed economic conditions or business strategies and could result in significant impairment charges or reversal in future years. Refer to note 6 (h), (i) and (j) for further description of the key assumptions used to determine the recoverable amount.

(6) Explanation of significant accounts

(a) Cash and cash equivalents

Cash in stock Demand deposits Time deposits	December 31, 2020 $ 1,919 1,063,293 - $ 1,065,212	December 31, 2019
		2,023 846,318 388,357
		1,236,698

Please refer to note 6(v) for the exchange rate risk, interest rate risk, and sensitivity analysis of the financial assets and liabilities of the Group.

• (b) Financial assets at fair value through other comprehensive income

Listed common shares Unlisted common shares	December 31, 2020 $ 513,704 95,336 $ 609,040	December 31, 2019
		380,753 101,321
		482,074

(i) Equity investments at fair value through other comprehensive income

The Group designated the investments shown above as equity securities at fair value through other comprehensive income because these equity securities represent those investments that the Group intends to hold for long-term strategic purposes.

(Continued)

31

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

During 2020, the Group has sold its listed common shares as a result of a takeover offer for cash. The shares sold had a fair value of $29,488 thousand and the Group realized a gain of $2,488 thousand which is already included in other comprehensive income. The gain has been transferred to retained earnings.

During 2019, the Group has sold its listed common shares held as a result of a takeover offer for cash. The shares sold had a fair value of $15,593 thousand and the Group realized a loss of $4,891 thousand which was recognized as other comprehensive income, and thereafter, was transferred to retained earnings.

• (ii) For credit risk (including the impairment of debt investments) and market risk, please refer to note 6 (v).

• (iii) As of December 31, 2020 and 2019， the financial assets at fair value through other comprehensive income of the Group had not been pledged as collateral for its borrowings.

• (c) Notes and trade receivables

Notes receivables–measured as amortized cost Trade receivables–measured as amortized cost Less: allowance for doubtful accounts	December 31, 2020 $ 5,922 4,015,019 12,284 $ 4,008,657	December 31, 2019
		7,669 5,264,146 35,008
		5,236,807

The Group applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, notes and trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as the incorporated forward looking information, including macroeconomic and relevant industry information. The loss allowance provisions were determined as follows:

Current 1 to 90 days past due 91 to 180 days past due 181 to 360 days past due More than a year	December 31, 2020	December 31, 2020
	Gross carrying amount $ 3,868,133 141,835 4,953 3,417 2,603 $ 4,020,941	Weighted-average loss rate 0.09% 1.65% 28.91% 72.75% 100.00%	Loss allowance provision
			3,426 2,337 1,432 2,486 2,603
			12,284

(Continued)

32

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Current 1 to 90 days past due 91 to 180 days past due 181 to 360 days past due More than a year	December 31, 2019	December 31, 2019
	Gross carrying amount $ 4,961,170 258,376 14,361 15,210 22,698 $ 5,271,815	Weighted-average loss rate 0.07% 0.81% 15.38% 39.27% 93.20%	Loss allowance provision 3,572 2,099 2,209 5,973 21,155 35,008

The movement in the allowance for notes and trade receivables were as follows:

Balance at January 1 Impairment losses reversed Disposal of subsidiary Amounts written off Foreign exchange gains/(losses) Balance at December 31	For the years ended December 31 2020 2019 $ 35,008 40,272 (1,758) (4,464) (233) - (20,754) (634) 21 (166) $ 12,284 35,008
	2020 $ 35,008 (1,758) (233) (20,754) 21 $ 12,284

The aforementioned notes and trade receivables of the Group had not been pledged as collateral for its borrowings.

• (d) Other receivables

Income tax refund receivables Others	December 31, 2020 $ 426,291 1,869 $ 428,160	December 31, 2019 303,892 5,073 308,965

The company had no other receivables impairment as of December 31, 2020 and 2019.

• (e) Inventories

Raw materials and consumables Work in process Finished goods Merchandise inventory	December 31, 2020 $ 380,230 969,570 312,395 295,620 $ 1,957,815	December 31, 2019 239,613 1,210,557 521,946 310,128 2,282,244

(Continued)

33

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019, the Group recognized cost of sales and expense amounted to $14,365,906 thousand and $17,271,333 thousand, respectively. For the years ended December 31, 2020 and 2019, the amounts of loss on valuation of inventories was $24,594 thousand and $96,023 thousand, and recognized as lost of sales.

As of December 31, 2020 and 2019, the Group did not provide any inventories as collateral for its borrowings.

(f) Investments accounted for using equity method

A summary of the Group’ s financial information for investments accounted for using the equity method at the reporting date is as follows:

A summary of the Group’ s financial information for invest method at the reporting date is as follows:	ments accounted fo	r using the equity
Associates	December 31, 2020 $ 995,638	December 31, 2019
		1,018,374

(i) Associates

The Group’s financial information for investments accounted for using the equity method that are individually insignificant was as follows:

The Group’s financial information for investments acco are individually insignificant was as follows:	unted for using the	equity method tha
Carrying amount of individually insignificant associates’ equity	December 31, 2020 $ 995,638	December 31, 2019
		1,018,374

In 2020 and 2019, the Group’s share of the net income of associates was as follows:

Attributable to the Group: Loss from continuing operations Other comprehensive (loss) income Comprehensive income	2020 $ (65,212) 23,314 $ (41,898)	2019 (18,127) 7,950
		(10,177)

• (ii) Guarantee

As of December 31, 2020 and 2019, investments accounted for using the equity method of the Group had been pledged as collateral. Please refer to note (8).

(g) Loss control of subsidiaries

• (i) Schmidt Scientific Taiwan Ltd.

The Group had sold 57.17% of its shares in Schmidt Scientific Taiwan Ltd. to a third party with a consideration of $18,943 thousand on January 15, 2020. The Group derecognized Schmidt Scientific Taiwan Ltd. from the date of disposal as its subsidiary. The Group derecognized the assets, liabilities and the related equity components of Schmidt Scientific Taiwan Ltd., and recognized a loss on disposal of $25,137 thousand, and recorded it as net gains (losses) on disposal of investment.

(Continued)

34

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Loss of disposal also included the amount $15,464 thousand due to loss control of subsidiaries that reclassified from equity to net gains (losses).

The carrying amount of assets and liabilities of Schmidt Scientific Taiwan Ltd. on the date of disposal was as follow:

Cash and cash equivalents	$	73,132
Note and trade receivables (Includes related parties)		45,171
Inventories		22,882
Other current assets		10,878
Non-current financial assets at fair value through other comprehensive
income		5,985
Property, plant and equipment		63,358
Deferred tax assets		61,662
Other non-current assets		8,423
Short-term borrowings		(36,000)
Note and Trade payables (Includes related parties)		(47,452)
Other current liabilities		(14,786)
Long-term borrowings		(11,391)
Deferred tax liabilities		(114,466)
Net defined benefit liabilities—non-current		(17,312)
Other non-current liabilities		(30)
Carrying amount of net assets	$	50,054

(h) Property, plant, and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Group for the years ended December 31, 2020 and 2019, were as follows:

Cost or deemed cost: Balance on January 1, 2020 Additions Disposals Disposal of subsidiary Reclassification Effect of movements in exchange rates Balance on December 31, 2020 Balance at January 1, 2019 Additions Disposal Reclassification Effect of movements in exchange rates Balance on December 31, 2019	Land $ 459,354 - - (52,126) - - $ 407,228 $ 459,354 - - - - $ 459,354	Buildings and constructions 3,916,170 167 (1,340,223) (23,609) 11,041 (5,064) 2,558,482 4,050,078 30,366 (130,598) 21,967 (55,643) 3,916,170	Machinery and equipment 15,350,580 - (3,771,925) (454) 1,108,192 (151) 12,686,242 16,321,932 295,320 (1,946,514) 829,244 (149,402) 15,350,580	Office facilities 516,810 33 (198,557) (14,358) 16,259 (694) 319,493 489,129 40,842 (11,235) 6,100 (8,026) 516,810	Other facilities 4,613,457 - (22,193) - 115,320 196 4,706,780 4,532,377 151,385 (318,154) 248,397 (548) 4,613,457	testing equipment 470,250 554,203 - - (788,146) (157) 236,150 1,150,368 447,573 - (1,119,340) (8,351) 470,250	Construction in progress 2,056,158 3,038,126 - - (706,379) 77,715 4,465,620 369,547 1,918,710 - (143,939) (88,160) 2,056,158	Total 27,382,779 3,592,529 (5,332,898) (90,547) (243,713) 71,845
								25,379,995
								27,372,785 2,884,196 (2,406,501) (157,571) (310,130)
								27,382,779

(Continued)

35

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Deprecation and impairments loss: Balance on January 1, 2020 Deprecation Disposal Disposal of subsidiary Reclassification Effect of movements in exchange rates Balance at December 31, 2020 Balance at January 1, 2019 Deprecation Disposal Reclassification Effect of movements in exchange rates Balance on December 31, 2019 Carrying Value: Balance on December 31, 2020 Balance on December 31, 2019 Balance on January 1, 2019	Land $ - - - - - - $ - $ - - - - - $ - $ 407,228 $ 459,354 $ 459,354	Buildings and constructions 1,802,401 65,394 (1,125,742) (12,446) - (4,197) 725,410 1,892,738 85,379 (129,634) - (46,082) 1,802,401 1,833,072 2,113,769 2,157,340	Machinery and equipment 9,285,564 992,442 (2,432,333) (454) 296 (8,093) 7,837,422 10,041,430 1,125,377 (1,783,510) - (97,733) 9,285,564 4,848,820 6,065,016 6,280,502	Office facilities 399,872 26,284 (160,395) (14,289) (538) (551) 250,383 379,422 37,259 (10,728) 106 (6,187) 399,872 69,110 116,938 109,707	Other facilities 2,990,698 319,389 (21,243) - (2) 145 3,288,987 2,964,446 332,054 (296,805) (8,608) (389) 2,990,698 1,417,793 1,622,759 1,567,931	testing equipment - - - - - - - - - - - - - 236,150 470,250 1,150,368	Construction in progress - - - - - - - - - - - - - 4,465,620 2,056,158 369,547	Total 14,478,535 1,403,509 (3,739,713) (27,189) (244) (12,696)
								12,102,202
								15,278,036 1,580,069 (2,220,677) (8,502) (150,391)
								14,478,535
								13,277,793
								12,904,244
								12,094,749

(i) Guarantee

As of December 31, 2020 and 2019, the property, plant and equipment of the Group had been pledged as collateral for long-term borrowings. Please refer to note 8.

• (ii) Acquisition of machinery and equipment

The Group calculated capitalization interest rate base on 1.92%~4.8% and 1.97%~4.99% for the year 2020 and 2019. The capitalized borrowings related to the acquisition of machinery and equipment were $77,176 thousand and $9,682 thousand, respectively.

• (iii) Assets of the Group that have indications of impairment on the reporting date are tested for impairment on the basis of individual assets or their CGUs. According to the test for impairment for 2020, the recoverable amount for an asset or a CGU is higher than its book value. Therefore, the Group did not recognize any impairment loss on property, plant and equipment.

• (iv) Shanghai Unitech Electronics Co., Ltd. cooperated with Shanghai local government's house and land expropriation to relocate company’s land and factory buildings. Therefore, Shanghai Unitech Electronics Co., Ltd. received partial compensation of $914,065 thousand (CNY 215,730 thousand) and $902,382 thousand (CNY 199,730 thousand) in 2020 and 2019, respectively. As of December 31,2020, the partial compensation received was classified into other current liabilities with the amounts $727,944 thousand (CNY 166,775 thousand). As of December 31, 2019, classified into other non-current liabilities with the amounts $788,262 thousand (CNY 183,418 thousand). Please refer to Note 6 (u) for the actual expenses and the recognition of compensation income.

(Continued)

36

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• (v) Shanghai Unitech Electronics (Nantong) Co., Ltd. cooperated with the local government for development to build a factory. Therefore, it received $61,045 thousand (CNY14,259 thousand) and $63,677 thousand (CNY14,250 thousand), receptively, as a starting subsidy, which was classified into other income-subsidies in 2020 and 2019, respectively.

(i) Right-of-use-assets

The Group leases many assets including land and buildings, machinery and equipment and transportation facilities. Information about leases for which the Group as a lease was represented below:

Cost: Balance at January 1, 2020 Additions Disposal Effect on movements of exchange rates Balance at December 31, 2020 Balance at January 1, 2019 Effect of Retrospective application of IFRS16 Additions Disposal Transfer from property, plant and equipments Transfer from long-term prepaid rent Effect on movements of exchanges rates Balance at December 31, 2019 Accumulated depreciation and impairment losses: Balance at January 1, 2020 Deprecation for the year Disposal Effect on movements of exchange rates Balance at December 31, 2020 Balance at January 1, 2019 Depreciation for the year Effect on movements of exchange rates Balance at December 31, 2019	Land $ 632,728 - - 3,003 $ 635,731 $ - 436,015 5,072 - 143,939 50,804 (3,102) $ 632,728 $ 54,712 53,741 - 183 $ 108,636 $ - 54,955 (243) $ 54,712	Buildings and constructions 160,738 2,482 (170) - 163,050 - 154,357 6,381 - - - - 160,738 36,006 37,759 - - 73,765 - 36,006 - 36,006	Office facilities 7,181 11,758 (3,039) - 15,900 - 7,107 74 - - - - 7,181 4,056 3,393 (3,039) - 4,410 - 4,056 - 4,056	Transportation facilities 36,214 5,130 (1,571) - 39,773 - 33,755 2,459 - - - - 36,214 11,735 11,448 (1,014) - 22,169 - 11,735 - 11,735	Other assets 18,981 3,154 (838) - 21,297 - 1,942 12,145 (236) 5,130 - - 18,981 3,333 5,985 (838) - 8,480 - 3,333 - 3,333	Total 855,842 22,524 (5,618) 3,003 875,751 - 633,176 26,131 (236) 149,069 50,804 (3,102) 855,842 109,842 112,326 (4,891) 183 217,460 - 110,085 (243) 109,842

(Continued)

37

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Carrying amount: Balance at December 31, 2020 Balance at December 31, 2019 Balance at January 1, 2019	Land $ 527,095 $ 578,016 $ -	Buildings and constructions 89,285 124,732 -	Office facilities 11,490 3,125 -	Transportation facilities 17,604 24,479 -	Other assets 12,817 15,648 -	Total 658,291
						746,000
						-

Assets of the group that have indications of impairment on the reporting date are tested for impairment on the basis of individual assets or their CGUs. According to the test for impairment for 2020, the recoverable amount for an asset or a CGU is the higher than its book value. Therefore, the group did not recognize any impairment loss on right-of-use assets.

(j) Intangible assets

The cost, amortization and impairment of the intangible assets of the Group for the years ended December 31, 2020 and 2019, were as follows:

Costs: Balance at January 1, 2020 Additions Balance at December 31, 2020 Balance at January 1, 2019 Additions Balance at December 31, 2019 Accumulated amortization and impairment losses: Balance at January 1, 2020 Amortization for the year Balance at December 31, 2020 Balance at January 1, 2019 Amortization for the year Balance at December 31, 2019 Carrying value: Balance at December 31, 2020 Balance at December 31, 2019 Balance at January 1, 2019

Computer Software

$ 41,311 84,143 $ 125,454 $ 38,421 2,890 $ 41,311 $ 4,940 12,072 $ 17,012 $ 634 4,306 $ 4,940 $ 108,442 $ 36,371 $ 37,787

(Continued)

38

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(i) Amortization and impairment

The amortization of intangible assets and their repairment losses are in clued in the statement of comprehensive income:

Cost of sales Operating expense	2020 $ 1,327 $ 10,745	2019
		-
		4,306

Assets of the Group that have indications of impairment on reporting date are tested for impairment on the basis of individual assets on their CGUs. According to the test for important for 2020, the recoverable amount for an asset or a CGU is higher than its book value. Therefore, the group did not recognize any impairment loss on intangible assets.

(k) Short-term notes and bills payable

Commercial paper payable Less: Prepaid interest Total	December 31, 2020	December 31, 2020
	Guarantee or acceptance institution	Range of interest rates (%) Amount 0.92% $ 70,000 (9) $ 69,991
	The Shanghai Commercial & Savings Bank, LTD.

As the year of December 31, 2019: None.

(l) Short-term borrowings

The short-term borrowings were summarized as follows:

Letters of credit Unsecured bank loans Secured bank loans Unused short-term credit lines Range of interest rates	December 31, 2020 $ 12,631 907,315 50 $ 919,996 $ 4,156,007 0.46%~4.65%	December 31, 2019
		17,499 1,003,011 428,177
		1,448,687
		3,229,610
		0.85%~4.65%

For the collateral for short-term borrowings, please refer to note 8.

(Continued)

39

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(m) Long-term borrowings

The details were as follows:

Unsecured bank loans Secured bank loans Other long-term payable Less: current portion Total Unused long-term credit lines		December 31, 2020 Rate Maturity year Amount 1.35%~1.68% 111~112 $ 375,000 1.32% 111 598,080 4.99% 113 2,137,253 1.10%~1.79% 111~114 3,792,000 0.74% 111 142,400 7,044,733 (1,438,954) $ 5,605,779 $ 2,361,638
	Currency	Rate
	TWD USD CNY TWD USD	1.35%~1.68% 1.32% 4.99% 1.10%~1.79% 0.74%

Unused long-term credit lines		$ 2,361,638
Unsecured bank loans Secured bank loans Less: current portion Total Unused long-term credit lines		December 31, 2019 Rate Maturity year Amount 1.45%~2.04% 111 $ 780,000 4.95%~5.00% 111 865,086 3.10%~3.11% 111 359,760 1.50%~2.60% 111~115 3,320,391 5,325,237 (1,298,493) $ 4,026,744 $ 2,053,914
	Currency	Rate
	TWD CNY USD TWD	1.45%~2.04% 4.95%~5.00% 3.10%~3.11% 1.50%~2.60%

(i) Collateral for long-term borrowings

For the collateral for long-term borrowings, please refer to note (8).

• (ii) Borrowings information is as follows:

• 1) The Group entered into a syndicated credit agreement with financial institutions, dominated by Taishin International Bank Co., Ltd., on April 19, 2016.

  • a) The syndicated banks of the Syndicated Loan Agreement consist of Taishin International Bank Co., Ltd., Taiwan Cooperative Bank, Chang Hwa Commercial Bank, Ltd., First Commercial Bank and Bank of Kaohsiung Co., Ltd..

    • i) The amount of total credit lines is US$25,000,000 which is to repay existing financial liabilities and expand working capital.

(Continued)

40

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

  - ii) Period of credit agreement, payment period and the way to repayment.

     1. Period: Three years from the first draw-down date.

     2. Payment period: The credit lines is used (revolving) during the credit period. But the expiring date of each credit amount cannot exceed the credit period.

     3. Way to repayment: The credit line should be repaid, amortized, decreased or cancelled on the basis of the rules of agreement.

  - iii) According to the syndicated credit agreement, during the credit period, the Group is based on the consolidated financial statements and auditor report to calculate and maintain certain financial ratios on balance sheet date. (i.e. equity ratio, interest coverage ratio, tangible net worth, self-owned asset ratio, etc.)

  - iv) The Group provided the same amount guarantees of promissory notes and the related-parties will be joint guarantors for the credit loan form this agreement.

  - v) The Group started to use this credit line on May 25, 2016.

  - vi) The Group liquidated all the credit line on May 8, 2019.

• 2) The Group entered into a syndicated credit agreement with financial institutions, dominated by Bank of Taiwan on March 30, 2017.

• a) The syndicated banks of the Syndicated Loan Agreement consist of Bank of Taiwan, Taiwan Business Bank Co., Ltd., Mega International Commercial Bank Co., Ltd., Taiwan Cooperative Bank, Taipei Fubon Commercial Bank Co., First Commercial Bank Ltd., Chang Hwa Commercial Bank, Ltd., Shin Kong Commercial Bank Co., Ltd. Land Bank of Taiwan, Agricultural Bank of Taiwan, and The Shanghai Commercial & Savings Bank, Ltd..

  • i) The amount of total credit lines is NTD4,500,000,000 which is to repay existing financial liabilities, purchase mechanical equipment, and afford the middle-stage of working fund.

  • ii) Period of credit agreement, payment period and the way to repayment.

    1. Period: Five years from the first draw-down date.

    2. Payment period:

       • a. A type: Credit line of medium-term secured loans is NT$2,800,000,000, which can be used partly but cannot be used by revolving. 6 months from the first-drawn date. After six months, the unused amount will be cancelled automatically and shall not be used.

(Continued)

41

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

        - b. B type: Credit line of medium-term secured loans is NTD$1,100,000,000, which can be used partly but cannot be used by revolving. 18 months from the first-drawn date. After 18 months, the unused amount will be cancelled automatically and shall not be used.

        - c. C type: Credit line of medium-term loans is NT$700,000,000, which can be used partly and can be used by revolving.

  - iii) According to the syndicated credit agreement, during the credit period, the Group is based on the consolidated financial statements and auditor report to calculate and maintain certain financial ratios on balance sheet date. (i.e. equity ratio, interest coverage ratio, tangible net worth, self-owned asset ratio, etc.)

  - iv) The Group provided the guarantees of promissory notes, mechanical equipment, and buildings and constructions as collaterals for this syndicated credit agreement.

  - v) The Group started to use this credit line on May 31, 2017. vi) The Group repaid all the credit line on April 30, 2020.

• 3) The Group entered into a syndicated credit agreement with financial institutions, dominated by Bank of Taiwan on September 26, 2019.

• a) The syndicated banks of the Syndicated Loan Agreement consist of the leading bank and the managing bank is Bank of Taiwan. The participating banks are Taishin International Bank Co., Ltd., Chang Hwa Commercial Bank, Ltd., Taiwan Business Bank Co., Ltd., Bank SinoPac Co., Ltd. The Shanghai Commercial & Savings Bank, Ltd., First Commercial Bank.

  • i) The amount of total credit lines is US$24,000,000 which is to expand working capital.

  • ii) Period of credit agreement, payment period and the way to repayment.

    1. Period: Three years from the first draw-down date, but should be used within three months after the contract date.

    2. Payment period: On the regulation of agreement and under each condition, the period of using is 9 months from the starting date. After the maturity date, the unused amount will be cancelled automatically and shall not be used.

    3. Way to repayment: From the first-drawn date to the date after 12 months as one payment. After one payment, every six months is deemed as one payment. The total repayment has 5 payments. From first payment to fourth payment, the Group should pay the principal of 12.5%. As for the fifth payment, the Group should pay the principal of 50% or all the unpaid amount.

(Continued)

42

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Under any conditions, the borrowing should be repaid on the basis of the contract within the time and amount. If not, the borrowings should be fully repaid ahead of schedule.

The Group should repay all principal, interest, other payables, and expenses which were not repaid on the expiry date of the credit agreement.

• iii) According to the syndicated credit agreement, during the credit period, the Group is based on the consolidated financial statements and auditor report to calculate and maintain certain financial ratios on balance sheet date. (i.e. equity ratio, interest coverage ratio, tangible net worth, self-owned asset ratio, etc.)

At the year end of December 31, 2020, part of financial ratios cannot match the syndicated agreement. However, it will not be regarded as violation because the Group will adjust the financial ratios that corresponds the agreement after the end of the financial report date.

  - iv) The Group provided guarantees of promissory notes and the related-parties will be the joint guarantee for the credit loan from this agreement.

  - v) The first-drawn date is on November 18, 2019.

• 4) The Group entered into a syndicated credit agreement with financial institutions, dominated by Bank of Taiwan on September 26, 2019.

• a) The syndicated banks of the Syndicated Loan Agreement consist of Bank of Taiwan, Land Bank of Taiwan, Taiwan Cooperative Bank, Hua Nan Commercial Bank, Ltd., First Commercial Bank, Chang Hwa Commercial Bank, Ltd., Bank SinoPac Co., Ltd (China)., Mega International Commercial Bank Co., Ltd..

  • i) The amount of total credit lines is CNY300,000,000, which is used for building the factories.

  • ii) Period of credit agreement, payment period and the way to repayment.

    1. Period: Three years from the first draw-down date, or if the expiry date is not a business day, then it is the previous business day.

    2. Payment period: 18-month from first draw-down date, or the date when the credit line becomes 0 (the earlier one). The loan will be cancelled automatically if the Group does not withdraw the credit line during the period.

    3. Way to repayment: The date after 12-month from the first-drawn date as one payment. The repayment will be divided into three payments, every six-month is deemed as one payment. The detail payment period and repayment are as below:

(Continued)

43

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

        - a. 24-month from the first draw-down date, should repay 10% of credit loan balance.

        - b. 30-month from the first draw-down date, should repay 15% of credit loan balance.

        - c. 36-month from the first draw-down date, should repay 75% of credit loan balance.

  - iii) According to the syndicated credit agreement, during the credit period, the Group is based on the consolidated financial statements and auditor report to calculate and maintain certain financial ratios on balance sheet date (i.e. equity ratio, interest coverage ratio, tangible net worth, self-owned asset ratio, etc.)

  - iv) The Group provided guarantees of promissory notes and the related-parties will be the joint guarantors for the credit loan from this agreement.

  - v) The first-drawn date is on October 29, 2019.

  - vi) The Group repaid the credit line on May 29, 2020.

• 5) The Group, entered into a syndicated credit agreement with financial institutions, dominated by Bank of Taiwan on March 31, 2020.

• a) The syndicated banks of the Syndicated Loan Agreement consist of Bank of Taiwan, Chang Hwa Commercial Bank, Ltd., Taiwan Business Bank Co., Ltd., Land Bank of Taiwan, Taiwan Cooperative Bank, First Commercial Bank, Bank SinoPac Co., Ltd., The Shanghai Commercial & Savings Bank, Ltd., Taipei Fubon Commercial Bank Co., Ltd., Mega International Commercial Bank Co., Ltd..

  • i) The amount of total credit lines is NT$3,800,000,000, which is used for repaying existing financial liabilities and expanding working capital.

  • ii) Period of credit agreement, payment period and the way to repayment.

    1. Period: Five years from the first draw-down date, but should be used within 6-month from the contract date, otherwise, the 6-month date from the contract date will be deemed as the first draw-down date.

    2. Payment period:

       • a. A type: Credit line of medium-term secured loans is NTD2,900,000,000, which can be used partly but cannot be used by revolving. 6 months from the first-drawn date. After six months, the unused amount will be cancelled automatically and shall not be used.

       • b. B type: Credit line of medium-term loans is NTD900,000,000, which can be used by revolving.

(Continued)

44

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

1. Way to repayment:

2. a. A type: The date after 18-month from the first-drawn date as one payment. The repayment will be divided into eight payments, every six-month is deemed as one payment.

3. b. B type: The B type borrowing has the revolving credit facility. If the part of credit lines expires, the remaining of the credit line could be borrowed further to repay for the original borrowings.

Under any circumstances, the Group should repay all principal, interest, other payables, and expenses which were not repaid on the expiry date of the credit agreement.

• iii) According to the syndicated credit agreement, during the credit period, the Group is based on the former three quarters of years of consolidated financial statements and auditor report to calculate and maintain certain financial ratios on balance sheet date. (i.e. equity ratio, interest coverage ratio, tangible net worth, self-owned asset ratio, etc.)

At the year end of December 31, 2020, part of financial ratios cannot match the syndicated agreement. However, it will not be regarded as the default, because the Group will adjust the financial ratios that correspond the agreement after the end of the financial report date.

• iv) The Group provided guarantees of promissory notes, mechanical equipment, buildings and constructions as collaterals for this syndicated credit agreement. Besides, the related-parties will be joint guarantors for the credit loan from this agreement.

(n) Lease liabilities

The Group’s lease liabilities were as follows:

Current Non-current For the maturity analysis, please refer to note 6(v).	December 31, 2020 $ 99,462 $ 407,326	December 31, 2019
		97,444
		457,680

The amounts recognized in profit or loss was as follows:

For the years ended December 31, 2020 Interest on lease liabilities $ 10,151 Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets $ 7,963	For the years ended December 31, 2019
	11,173
	18,879

(Continued)

45

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

The amounts recognized in the statement of cash flows for the Group was as follows:

Total cash outflow for leases	For the years ended December 31, 2020 $ 94,615	For the years ended December 31, 2019
		133,999

(i) Real estate leases

The Group leases land and buildings for its office space and employee accommodation. The leases of office space and employee accommodation typically run for 2-10 years. Some leases include an option to renew the lease for an additional period of the same duration after the end of the contract term.

The Group expects the relative proportions of fixed and variable lease payments to remain broadly consistent in future years.

(ii) Other leases

The Group leases office facilities, transportations and equipment, with lease terms of one to four years. In some cases, the Group has options transportation to purchase the assets at the end of the contract term; in other cases, it guarantees the residual value of the leased assets at the end of the contract term.

The Group also leases office facilities and parking space with contract terms of one to four years. These leases are short-term and leases of low-value items. The Group has selected not to recognize right-of-use assets and lease liabilities for these leases.

(o) Employee benefits

(i) Defined benefit plans

Reconciliation of defined benefit obligation at present value and plan asset at fair value are as follows:

Present value of the defined benefit obligations Fair value of plan assets Impact of asset ceiling Net defined benefit liabilities	December 31, 2020 $ 658,758 (446,035) 212,723 - $ 212,723	December 31, 2019 730,504 (421,579) 308,925 - 308,925

The Group makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for employees upon retirement. Plans (covered by the Labor Standards Law) entitle a retired employee to receive retirement benefits based on years of service and average monthly salary for the six months prior to retirement.

(Continued)

46

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

1) Composition of plan assets

The Group allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

The Group’ s Bank of Taiwan labor pension reserve account balance amounted to $446,035 thousand and 421,579 thousand as of December 31, 2020 and 2019. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

2) Movements in present value of the defined benefit obligations

The movement in present value of the defined benefit obligations for the Group were as follows:

Defined benefit obligations at January 1 Disposal of subsidiaries Current service costs and interest Remeasurements loss (gain) －Actuarial loss (gain) arising from: －Financial assumptions Contributions paid by the employe Defined benefit obligations at December 31	2020 $ 730,504 (33,482) 25,494 3,576 (67,334) $ 658,758	2019 661,184 - 24,357 70,781 (25,818) 730,504

• 3) Movements of defined benefit plan assets

The movements in the present value of the defined benefit plan assets for the Group were as follows:

Fair value of plan assets at January 1 Disposal of subsidiaries Interest income Remeasuerments loss (gain) －Return on plan assets excluding interest income Contributions paid by the employer Contributions Benefits paid Fair value of plan assets at December 31	2020 $ 421,579 (16,170) 6,625 10,090 91,245 (67,334) $ 446,035	2019 404,406 - 6,550 11,554 23,342 (24,273) 421,579

(Continued)

47

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• 4) Movements of the effect of the asset ceiling

There were no movements in the number of impacts of the consolidated company’ s defined benefit plan asset ceiling in 2020 and 2019.

• 5) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Group were as follows:

Current service costs Net interest of net liabilities for defined benefit obligations Past service costs Operating cost Administration expense	2020 $ 13,296 5,573 - $ 18,869 2020 $ 4,900 13,969 $ 18,869	2019 13,046 5,266 (846) 17,466 2019 5,042 12,424 17,466

• 6) Actuarial assumptions

The principal actuarial assumptions at the reporting date were as follows:

Discount rate Future salary increase rate	December 31, 2020 December 31, 2019 1.25% 0.75%~1.75% 0.75% 0.75%~2.00%

The expected allocation payment to be made by the Group to the defined benefit plans for the one-year period after the reporting date is $18,118 thousand.

The weighted average lifetime of the defined benefits plans is 11 years.

(Continued)

48

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

7) Sensitivity analysis

If the actuarial assumptions had changed, the impact on the present value of the defined benefit obligation shall be as follows:

December 31,2020 Discount rate Future salary increasing (decreasing) rate December 31,2019 Discount rate Future salary increasing (decreasing) rate	Influences of defined benefit obligations Increased0.25％ Decreased0.25％ (17,580) 18,262 18,124 (17,531) (18,413) 22,284 22,219 (18,441)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of pension liabilities in the balance sheets.

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2020 and 2019.

(ii) Defined contribution plans

The Disposal of subsidiaries allocates 6% of each employee’ s monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under these defined contribution plans, the Company allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation.

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to $151,940 thousand and $217,590 thousand for the years ended December 31, 2020 and 2019, respectively.

(Continued)

49

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(p) Income tax

(i) Income tax expense

The components of income tax in the years 2020 and 2019 were as follows:

2020 Current tax expense Current period $ - Adjustments for prior periods 7,806 7,806 Deferred tax expense Origination and reversal of temporary differences (155,473) Income tax (gain) expense $ (147,667) Reconciliation of income tax and (loss) profit before tax for 2020 and 2019 2020 Profit (Loss) before income tax $ (1,583,127) Income tax using the Company’s domestic tax rate $ (316,625) Effect of tax rates in foreign jurisdiction (30,065) Tax-exempt income (1,858) Tax incentives - Prior-period tax adjustments 7,806 Tax free subsidy income attributed to the epidemic (70,357) Recognition of previously unrecognized tax losses 244,137 Additional tax on Undistributed earnings - Change in unrecognized temporary differences 1,795 Others 17,500 Income tax (gain) expense $ (147,667)	2019
	383,570 7,438
	391,008
	154,090
	545,098
	is as follows: 2019
	2,276,185 455,237 5,780 9 (17,814) 78,056 - (3,669) 9,914 6,338 11,247 545,098

(ii) Reconciliation of income tax and (loss) profit before tax for 2020 and 2019 is as follows:

(Continued)

50

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(iii) Deferred tax assets and liabilities

• 1) Unrecognized deferred tax assets

Deferred tax assets have not been recognized in respect of the following items:

Tax effect of deductible Temporary Differences The carryforward of unused tax loss	December 31, 2020 $ 78,490 244,137 $ 322,627	December 31, 2019
		76,695 -
		76,695

• 2) Recognized deferred tax assets and liabilities

Changes in the amount of deferred tax assets and liabilities for 2020 and 2019 were as follows:

Deferred Tax Assets: Balance at January 1, 2020 Recognized in profit or loss Disposal of subsidiaries Balance at December 31, 2020 Balance at January 1, 2019 Recognized in profit or loss Balance at December 31, 2019 Deferred tax liabilities: Balance at January 1, 2020 Recognized in profit or loss Disposal of subsidiaries Balance at December 31, 2020 Balance at December 31, 2019 (Equal to opening balance)	Land revalue added rovaluation $ 171,517 - - $ 171,517 $ 171,517	Loss carryforward $ 59,343 160,000 (59,343) $ 160,000 $ 209,649 (150,306) $ 59,343 investment subsidiary net income 114,466 - (114,466) 114,466	Others Total 18,113 $ 77,456 (343) 159,657 (2,319) (61,662) 15,451 $ 175,451 21,897 $ 231,546 (3,784) (154,090) 18,113 $ 77,456 Other Total - $ 285,983 4,833 4,833 - (114,466) 4,833 $ 176,350 - $ 285,983

(iv) The Corporation’ s income tax return for the year 2018 had been examined by the tax authorities.

(Continued)

51

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(q) Capital and other equitiy

As of December 31, 2020, the number of authorized ordinary shares were 700,000 thousand shares (2019: 700,000 thousand shares) with par value of $10 per share. The total value of authorized ordinary shares was amounted to $7,000,000 thousand (2019: $7,000,000 thousand). As of that date, 619,407 thousand (2019: 619,407 thousand) of ordinary shares amounted $6,194,070 thousand (2019: $6,194,070 thousand) were issued. All issued shares were paid up upon issuance.

Reconciliation of shares outstanding for 2020 and 2019 was as follows:

(in thousand of shares)

Balance on January 1 Balance on December 31	Ordinary shares	Ordinary shares	Ordinary shares
	2020		2019
	619,407		619,407
	619,407		619,407

(i) Capital surplus

The balances of capital surplus as of December 31, 2020 and 2019, were as follows:

Share premium Stock options-fair value differences of associates and joint ventures under equity method Unclaimed dividend Disposal of subsidiaries	December 31, 2020 $ 2,675,703 166,550 170 717 $ 2,843,140	December 31, 2019
		2,675,703 156,101 170 -
		2,831,974

According to the R.O.C. Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, capital increases by transferring capital surplus in excess of par value should not exceed 10% of the total common stock outstanding.

(ii) Retained earnings

According to the Group’ s Article, net earnings should be used to offset the prior year’ s deficits, if any, before paying any income taxes. 10% of retained earnings will be as legal reserve. The rest of the amount and undistributed surplus will be allocated on the basis of the allocation plan proposed by the Board of Directors and submitted to stockholders for approval.

(Continued)

52

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Due to demand of expanding business, coordinating with Group’s long-term financial plan for sustainable development and stable economic development, The Group adopts Residual Dividend Policy. The main purpose for this policy is to measure financial demand that based on budget of future capital. The steps of distributions are as below: (1)The best capital budget. (2) Determine the financing required to meet the capital budget in the preceding paragraph. (3) Determine the amount of financing required to be financed by retained surplus (the remaining can be financed by cash increase or corporate bonds). (4) The remaining surplus can be distributed to shareholders in the form of dividends after retaining an appropriate amount according to operational needs. The distribution of future dividends takes into account the use of funds, and draws up an appropriate ratio of cash to stock dividends for the current year, in which cash dividends are 50% to 100%, and stock dividends are 50% to zero.

1) Legal reserve

When a company incurs no loss, it may pursuant to a resolution by a shareholders’ meeting, distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of capital may be distributed.

2) Special reserve

In accordance with Rule No. 1010012865 issued by the FSC on April 6, 2012, a portion of current-period earnings and undistributed prior-period earnings shall be reclassified as special earnings reserve during earnings distribution. The amount to be reclassified should equal the current-period total net reduction of other shareholders’ equity. Similarly, a portion of undistributed prior-period earnings shall be reclassified as special earnings reserve (and does not qualify for earnings distribution) to account for cumulative changes to other shareholders’ equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions.

The Company’s "other equity" item under the equity item on December 31, 2019 and 2018 were negative and a resolution was passed during the general meeting of shareholders held on June 9, 2020, and June 12, 2019 made a special surplus reserve of $17,306 thousand and $157,021 thousand, respectively.

As of December 31, 2020 and 2019, the value of special reserve was $174,327 thousand and $157,021 thousand, respectively.

(Continued)

53

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

3) Earnings distribution

Earnings distribution for 2019 and 2018 was decided by the resolution adopted, at the general meeting of shareholders held on June 9, 2020 and June 12, 2019, respectively. The relevant dividend distributions to shareholders were as follows:

Dividends distributed to ordinary shareholders: Cash	2019 Amount per share Total amount $ 0.80 495,526	2018	2018
	Amount per share $ 0.80	Amount per share 0.40	Total amount
			247,763

• (iii) Other comprehensive income accumulated in reserves, net of tax and non-controlling interest

Balance at January 1, 2020 Exchange differences on foreign operations The company Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income: The company Subsidiary Associate Remeasurement of defined benefits plan: The company Subsidiary Associate Unearned employee compensation: Associate Disposal of investments in equity instruments designated at fair value through other comprehensive income Other Disposal of subsidiary Balance at December 31, 2020	Exchange differences on translation of foreign financial statements $ (37,584) 64,067 - - - - - - - - - 15,211 $ 41,694	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income 53,104 - 143,525 38,014 841 - - - - (2,488) - - 232,996	Remeasurement of defined benefits plan (189,847) - - - - 6,514 943 42 - - - (464) (182,812)	Unearned employee compensation (7,543) - - - - - - - 4,921 - - - (2,622)	Non- controlling interests 20,446 - - - - - - - - - 992 (21,438) -	Total (161,424) 64,067 143,525 38,014 841 6,514 943 42 4,921 (2,488) 992 (6,691) 89,256

(Continued)

54

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Balance at January 1, 2019 Exchange differences on translation of foreign financial statements Subsidiary Associate Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income: The company Subsidiary Associate Remeasurement of defined benefits plan: The company Subsidiary Associate Unearned employee compensation: Associate Disposal of investments in equity instruments designated at fair value through other comprehensive income Other Balance at December 31, 2019	Exchange differences on translation of foreign financial statements $ 76,548 (114,132) - - - - - - - - - - $ (37,584)	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income (87,289) - - 112,373 22,460 669 - - - - 4,891 - 53,104	Remeasurement of defined benefits plan (129,827) - - - - - (58,352) (1,628) (40) - - - (189,847)	Unearned employee compensation (16,453) - - - - - - - - 8,910 - - (7,543)	Non- controlling interests 25,369 (174) - - - - - (536) - - - (4,213) 20,446	Total (131,652) (114,306) - 112,373 22,460 669 (58,352) (2,164) (40) 8,910 4,891 (4,213)
						(161,424)

(Continued)

55

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(r) Earnings per share

The details on the calculation of basic earnings per share and diluted earnings per share as of December 31, 2020 and 2019 as follow:

Basic earnings per share: Profit/(loss) attributable to ordinary shareholders of the Company Weighted average number of ordinary shares at (in thousand of shares) Diluted earnings per share: Profit/(loss) attributable to ordinary shareholders of the Company Effect of dilutive potential ordinary shares Weighted average number of ordinary shares (basic) Effect of employee share bonus Weighted average number of ordinary shares (diluted)	2020 2019 $ (1,436,452) 1,735,300 619,407 619,407 $ (2.32) 2.80 $ 1,735,300 $ 1,735,300 619,407 1,400 620,807 $ 2.80	2019
		1,735,300
		619,407
		2.80
		1,735,300

(s) Revenue from contracts with customers

(i) Details of revenue

The details of revenue were as follows:

Major products/services lines: Layer of 2 HDI Layer of 4 HDI Layer of 6 HDI Layer of 8 HDI More than 10 Layers Others		2020
	Electronics department $ 248,025 1,892,399 3,011,574 1,893,771 7,225,776 111,763 $ 14,383,308	Others - - - - - 3,664 3,664	Total
			248,025 1,892,399 3,011,574 1,893,771 7,225,776 115,427
			14,386,972

(Continued)

56

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Major products/services lines: 2 Level HDI 4 Level HDI 6 Level HDI 8 Level HDI More than 10 layers Other		2019
	Electronics department $ 322,760 2,713,142 3,532,538 3,334,624 12,205,970 - $ 22,109,034	Others - - - - - 309,292 309,292	Total
			322,760 2,713,142 3,532,538 3,334,624 12,205,970 309,292
			22,418,326

• (t) Remuneration to employee and direstors

In accordance with the Articles of Incorporation the Group should contribute 1% to 5% of the profit as employee compensation and no more than 3% as directors' and supervisors' remuneration when there is profit for the year. However, if the Company has accumulated deficits, the profit should be reserved to offset the deficit.

Due to the loss, there is no surpulus to be allocated. Therefore, the Company did not accrue the remuneration to employee and directors in 2020.

For the year ended December 31, 2019, the Company estimated its employee remuneration amounting to $45,000 thousand and directors' remuneration amounting to $23,000 thousand, respectively. The estimated amounts mentioned above are calculated based on the net profit before tax, excluding the remuneration to employee and directors of each period, multiplied by the percentage of remuneration to employee and directors as specified in the Company's Articles. These remunerations were expensed under operating costs or operating expenses during 2019. The amounts, as stated in the consolidated financial statements, are identical to those of the actual distributions for 2019.

• (u) Non-operating income

• (i) Interest income

The details of interest income were as follows:

Interest income from bank deposits Other interest income Interest income from bank deposits	2020 $ 5,838 3 $ 5,841	2019
		11,017 -
		11,017

(Continued)

57

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(ii) Other income

The details of other income were as follows:

The details of other income were as follows:
Compensation income Design income Subsidy Other income Dividend income	2020 $ 12,773 29,658 1,446,239 32,951 9,826 $ 1,531,447	2019
		18,785 18,913 112,238 37,238 6,574
		193,748

In order to coordinate with Shanghai City Government for the land project, the subsidiary Shanghai Unitech Electronics Co., Ltd. signed the compensation agreement of right-of-use takeover, movement and employee lay off with Xujing Town Land Expropriation Office in China. In 2020 and 2019, Shanghai Unitech Electronics Co., Ltd. received parts of subsidy, which amount is $914,065 thousand (RMB 215,730 thousand) and $902,382 thousand (RMB 199,730 thousand), respectively. Shanghai Unitech Electronics (Nantong) Co., Ltd. also recognized $1,016,548 thousand (CNY 237,440 thousand) and $48,561 thousand (CNY 10,867 thousand) in 2020 and 2019, due to the removement expense resulting from employee lay-off expense, disposal of land, property, plant and equipment and other losses due to the removement as operating expenses and other losses. Meanwhile, Shanghai Unitech Electronics (Nantong) Co., Ltd. recognized employee lay-off, equipment removement, and disposal income as $1,016,548 thousand (CNY237,440 thousand) and $48,561 thousand (CNY 10,867 thousand), respectively.

In order to coordinate with Nantong City Government for the land project, the subsidiaries Shanghai Unitech Electronics Co., Ltd. and Unitech Electronics International Limited (Unitech BVI) signed an investment agreement with the committee of Nantong Hi-Tech Industrial Development Zone for setting up the new company called Shanghai Unitech Electronics (Nantong) Co., Ltd. in October, 2017. According to the agreement, Nantong City Government promised to give Shanghai Unitech Electronics Co., Ltd. 50% of the land subsidy once the engineering project started. After finishing the engineering project and acceptance, Nantong City Government gave 50 % of the subsidy in 15 days. Shanghai Unitech Electronics (Nantong) Co., Ltd. received $61,045 thousand (CNY 14,259 thousand) and $63,677 thousand (CNY 14,250 thousand) as a starting subsidy, which was also classified into subsidy income.

Due to Covid-19, the virus has influenced the Group’s operations. In order to deal with the severe situation, the Group applied for subsidies legally. The amount of subsidies to the Group in 2020 is $351,758 thousand.

(Continued)

58

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(iii) Other gains and losses

The details of other gains and losses were as follows:

Foreign exchange gains (losses) Losses on disposal of subsidiary Gains on financial assets at fair value through profit or loss Losses on disposals of property, plant and equipment Compensation losses Others Miscellaneous disbursements	2020 $ (58,375) (25,137) 403 (460,231) (4,831) (512) (70,180) $ (618,863)	2019 (104,772) - - (59,211) (11,616) (7,261) (8,595) (191,455)

(iv) Financial costs

The details of finance costs were as follows:

Interest expense on borrowings Handling fee Interest expense on lease liabilities Less: Interest capitalization	2020 $ (184,456) (8,771) (10,151) 77,176 $ (126,202)	2019 (145,902) (834) (11,173) 9,682 (148,227)

(v) Financial instruments

• (i) Credit risk

1) Credit risk exposure

The carrying amount of financial assets and contract assets represents the maximum amount exposed to credit risk.

2) Concentration of Credit risk

During 2020, the Group has a large customer base, it has not concentrated on transactions with a single customer. Therefore, there was no concentration of credit risk in its trade receivables. To minimize credit risk, the Group periodically evaluates the Group’s financial positions.

(Continued)

59

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(ii) Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements.

Carrying amount December 31,2020 Non-derivative financial liabilities Short-term borrowings $ 919,996 Short-term notes and bills payable 69,991 Trade payables 3,037,371 Other payable 997,369 Leases liabilities 506,788 Long term borrowings, current portion 1,438,954 Long-term borrowings 5,605,779 $ 12,576,248 December 31,2019 Non-derivative financial liabilities Short-term borrowings $ 1,448,687 Notes payable 1,856 Trade payable 3,054,768 Other payable 805,238 Lease liabilities 555,124 Long term borrowings, current portion 1,298,493 Long-term borrowings 4,026,744 $ 11,190,910	Contractual cash flows 925,945 69,991 3,037,371 997,369 546,092 1,466,041 6,187,245 13,230,054 1,459,137 1,856 3,054,768 805,238 592,679 1,310,917 4,289,897 11,514,492	Within 12 months 925,945 69,991 3,037,371 997,369 107,676 1,466,041 152,116 6,756,509 1,459,137 1,856 3,054,768 805,238 105,195 1,310,917 105,765 6,842,876	1-5 years - - - - 335,743 - 6,035,129 6,370,872 - - - - 328,850 - 4,173,813 4,502,663	Over 5 years
				- - - - 102,673 - -
				102,673
				- - - - 158,634 - 10,319
				168,953

(Continued)

60

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• (iii) Currency risk

• 1) Exposure to foreign currency risk

The Group’s significant exposure to foreign currency risk were as follows:

		The Group’s s	ignificant	exposure to foreig	n curren	cy risk we	re as follows:
	F	inancial assets: Monetary items USD EUR JPY CNY inancial liabilities: Monetary items USD EUR JPY CNY		December 31, 2020		Foreign currency 201,579 5,021 14,242 1 52,301 68,876 264 505,584 24,445	December 31, 2019
			Foreign currency $ 175,077 4,447 1,278 53,310 $ 118,320 264 79,471 24,894	Exchange rate USD/TWD= 28.48 EUR/TWD= 35.02 JPY/TWD= 0.28 CNY/TWD= 4.38 USD/TWD= 28.48 EUR/TWD= 35.02 JPY/TWD= 0.28 CNY/TWD= 4.38	TWD		Exchange rate TWD USD/TWD= 29.98 6,043,346 EUR/TWD= 33.59 168,659 JPY/TWD= 0.28 3,931 GBP/TWD= 39.96 22 CNY/TWD= 4.31 225,158 USD/TWD= 29.98 2,064,911 EUR/TWD= 33.59 8,859 JPY/TWD= 0.28 139,541 CNY/TWD= 4.31 105,235
					4,986,180 155,730 353 233,338 3,369,765 9,262 21,958 108,960
	F

• 2) Sensitivity ananlysis

The Group’s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, trade and other receivables, financial assets at fair value through other comprehensive income, loans and borrowings; and trade and other payables that are denominated in foreign currency.

A strengthening (weakening) of 1% of the NTD against the USD, EUR, CNY, and JPY as of December 31, 2020 and 2019 would have increased (decreased) the equity by $14,925 thousand and $32,981 thousand. This analysis is based on foreign currency exchange rate variances that the Group considered to be reasonably possible at the reporting date. The analysis assumes that all other variables remain constant and ignores any impact of forecasted sales and purchases.

• 3) Foreign exchange gain and loss on monetary items

Since the Group has many kinds of functional currency, the information on foreign exchange gain (loss) on monetary items is disclosed by total amount. For years 2020 and 2019, foreign exchange gain (loss) (including realized and unrealized portions) amounted to $58,375 thousand and $104,772 thousand, respectively.

(Continued)

61

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(iv) Interest rate analysis

Please refer to the notes on liquidity risk management and interest rate exposure of the Group's financial assets and liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non derivative financial instruments on the reporting date. Regarding assets with variable interest rates, the analysis is based on the assumption that the amount of assets outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 1% when reporting to management internally, which also represents the Group management's assessment of the reasonably possible interest rate change.

If the interest rate had increased or decreased by 1% basis points, the Group’s net income would have increased or decreased by $76,139 thousand and $69,884 thousand for 2020 and 2019 with all other variable factors remaining constant. This is mainly due to the Group’ s borrowing at variable rates and investment in variable-rate bills.

(v) Other market price risk

For the years ended December 31, 2020 and 2019, the sensitivity analyses for the changes in the securities price at the reporting date were performed using the same basis for the profit and loss as illustrated below:

loss as illustrated below:
Prices of securities at the reporting date Increasing 1% Decreasing 1%	For the years ended December 31,
	2020	Net income - -	2019
	Other comprehensive income after tax $ 6,090 $ (6,090)		Other comprehensive income after tax 4,821 (4,821)	Net income
				-
				-

(vi) Fair value of financial instruments

1) Fair value hierarchy

The fair value of financial assets and liabilities at fair value through profit or loss, financial instruments used for hedging, and financial assets at fair value through other comprehensive income is measured on a recurring basis. The carrying amount and fair value of the Group’ s financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required:

(Continued)

62

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Financial assets at fair value through other comprehensive income Financial assets measured at amortized cost Cash and cash equivalents Notes receivable Trade receivable Other receivable Other receivable-related party Subtotal Total Financial liabilities at fair value through profit or loss Bank loans Short-term notes and bills payable Trade payable Other payable Lease liabilities Subtotal Total Financial assets at fair value through other comprehensive income Financial assets measured at amortized cost Cash and cash equivalents Notes receivable Trade receivable Other receivable Other receivable-related party Subtotal Total		December 31, 2020	December 31, 2020	December 31, 2020
	Book Value $ 609,040 1,065,212 5,922 4,002,735 1,869 571 5,076,309 $ 5,685,349 $ 7,964,729 69,991 3,037,371 997,369 506,788 12,576,248 $ 12,576,248		Fair value
		Level 1 Level 2 Level 3 513,704 - 95,336 - - - - - - - - - - - - - - - - - - 513,704 - 95,336 - - - - - - - - - - - - - - - - - - - - - December 31, 2019			Total
					609,040
					- - - - -
					-
					609,040
					- - - - -
					-
					-
	Book Value $ 482,074 1,236,698 7,662 5,229,145 5,073 765 6,479,343 $ 6,961,417		Fair value
		Level 1 380,753 - - - - - - 380,753	Level 2 - - - - - - - -	Level 3 101,321 - - - - - - 101,321	Total
					482,074
					- - - - -
					-
					482,074

(Continued)

63

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Financial liabilities measured at amortized cost Back loan Notes payable Trade payable Other payable Lease liabilities Subtotal Total		December 31, 2019	December 31, 2019	December 31, 2019
	Book Value $ 6,773,924 1,856 3,054,768 805,238 555,124 11,190,910 $ 11,190,910		Fair value
		Level 1 - - - - - - -	Level 2 - - - - - - -	Level 3 - - - - - - -	Total
					- - - - -
					-
					-

• 2) Valuation techniques for financial instruments not measured at fair value

The Group’ s valuation techniques and assumptions used for financial instruments not measured at fair value are as follows:

• a) Financial assets measured at amortized cost

If the quoted prices in active markets are available, the market price is established as the fair value. However, if quoted prices in active markets are not available, the estimated valuation or prices used by competitors are adopted.

• b) Financial assets and financial liabilities measured at amortized cost

If there is quoted price generated by transactions, the recent transaction price and quoted price data is used as the basis for fair value measurement. However, if no quoted prices are available, the discounted cash flows are used to estimate fair values.

• 3) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

The Group’s financial instruments that use Level 3 inputs to measure fair value include “financial assets measured at fair value through profit or loss – debt investments” and “fair value through other comprehensive income – equity investments”.

(Continued)

64

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Quantified information of significant unobservable inputs was as follows:

Inter-relationship between significant unobservable inputs Valuation Significant and fair value Item technique unobservable inputs measurement Financial assets at Comparable ‧Price-Earnings ratio ‧Higher the rate, fair value through public and (2020.12.31at 1.33 and higher the fair other comprehensive company method 2019.12.31 at 1.5) value income equity ‧Lack of market liquidity ‧Lack of market investments without discount rate liquidity, the higher an active market (2020.12.31 at 18.55% the discount, the and 2019.12.31 at lower the fair value 15.70%)

• (w) Financial risk management

• (i) Overview

The Group have exposures to the following risks from its financial instruments:

• 1) credit risk

• 2) liquidity risk

• 3) market risk

The following likewise discusses the Group’s objectives, policies and processes for measuring and managing the above mentioned risks. For more disclosures about the quantitative effects of these risks exposures, please refer to the respective notes in the accompanying consolidated financial statements.

(ii) Structure of risk management

The Group’s risk management policies are established to identify and analyze the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Group Audit Committee oversees how management monitors compliance with the Group’ s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Group Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

(Continued)

65

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(iii) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers and investments in debt securities.

The main potential credit risk of the Group is derived from financial products, such as accounts receivable, but the main sales target are world-renowned manufacturers. In order to reduce the credit risk, the Group also regularly evaluates the customer’s operating conditions and the possibility of recovery for period receivables. Because the customer has a large customer base and has a good reputation of profit and credit history, there is no risk of concentration on the credit risk of the consolidated company's accounts receivable.

1) Investments

The exposure to credit risk for the bank deposits, fixed income investments, and other financial instruments is measured and monitored by the Group’s finance department. The Group only deals with banks, other external parties, corporate organizations, government agencies and financial institutions with good credit rating. The Group does not expect any counterparty above fails to meet its obligations hence there is no significant credit risk arising from these counterparties.

2) Guarantees

The Group’s policy is to provide financial guarantees only to wholly owned subsidiaries. At December 31, 2020, no other guarantees were outstanding (2019: none).

(iv) Liquidity risk

The Group manages sufficient cash and cash equivalents so as to cope with its operations and mitigate the effects of fluctuations in cash flows. The Group’ s management supervises the banking facilities and ensures compliance with the terms of loan agreements.

Loans and borrowings from the bank form an important source of liquidity for the Group. As of December 31, 2020 and 2019, the Group’s unused credit line were amounted to $6,517,645 thousand and $5,283,524 thousand, respectively.

(v) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

1) Currency risk

The Group is exposed to currency risk on sales, purchases, and borrowings that are denominated in a currency other than the respective functional currencies of the Group’s entities, primarily the TWD, US Dollar (USD), and Chinese Yuan (CNY). The currencies used in these transactions are NTD, USD and CNY.

(Continued)

66

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

For the Group that use TWD as their functional currency, all borrowed CNY and US dollar loans will use forward contracts with the same maturity date as the loan repayment date for hedging.

Loan interest is priced in the currency of the principal of the loan. Generally speaking, the currency of the borrowing is the same as the currency of the cash flow generated by the operation of the consolidated company, mainly in the TWD, except for CNY and US dollars. In this case, economic hedging is provided without the need to sign derivatives, so hedging accounting is not adopted.

Regarding other monetary assets and liabilities denominated in foreign currencies, when short-term imbalance occurs, the Group buys or sells foreign currencies at real-time exchange rates to ensure that the net risk of risk remains at an acceptable level.

2) Interest rate risk

This is achieved partly by entering into fixed-rate instruments and partly by borrowing at a floating rate and using interest rate swaps as hedges of variability in cash flows attributable to movements in interest rates.

3) Other market price risk

The Group is exposed to equity price risk due to the investments in equity securities. This is a strategic investment and is not held for trading. The Group does not actively trade in these investments as the management of the Group minimizes the risk by holding different investment portfolios.

(x) Capital management

The Group’s objectives for managing capital to safeguard the capacity to continue to operate, to continue to provide a return on shareholders, to maintain the interest of other related parties, and to maintain an optimal capital structure to reduce the cost of capital.

As of December 31, 2020 the Group’s capital management strategy is consistent with the prior year as of December 31, 2019 . The Group’s debt-to-equity ratio at the end of the reporting period as of December 31, 2020 and 2019 are as follows:

Total liabilities Less: cash and cash equivalents Net debt Total equity Debt-to-equity ratio at December 31	December 31, 2020 $ 14,162,497 (1,065,212) $ 13,097,285 $ 9,671,800 % 135.42	December 31, 2020 $ 14,162,497 (1,065,212) $ 13,097,285 $ 9,671,800 % 135.42	December 31, 2019 13,677,558 (1,236,698) 12,440,860 11,335,652 % 109.75
	$ $ $

(Continued)

67

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(7) Related-party transactions

• (a) Parent company and ultimate controlling company

The company is both the parent company and the ultimate controlling party of the Group.

• (b) Names and relationship with related parties

The followings are entities that have had transactions with related party during the periods covered in the consolidated financial statements.

Name of related party Relationship with the Group CHANG, YUAN-MING President of the company CHEN, CHENG-HSIUNG Director of the company Fulltech Fiber Glass Corp. An associate Ideal Bike Corporation The entity’s president is the second immediate family of the president of the Company Unitech Printed Circuit Humanities and The entity’s president is the first immediate family Education Foundation of the president of the Company Taiwan Federation of commerce The entity’s chairman is the first immediate family of the president of the Company Pan-Pacific & Southeast Asia Women’s The entity’s chairman is the first immediate family Association Ppseawa Taiwan R.O.C. of the president of the Company TESD Foundation The entity’s president is the first immediate family of the president of the Company Taiwan Coalition of Service Industries The entity’s chairman is the president of the Company The Business Development Foundation on the The entity’s Vice-president is the president of the Chinese Straits Company

• (c) Significant transactions with related parties

• (i) Property transaction

  • 1) Acquisitions of financial assets

The acquisitions of financial assets from related parties are summarized as follows:

Relationship Ideal Bike Corporation	Account		2020			Number of shares 34,000	2019	2019
		Number of shares -	Repose Acquisition price $ -				Repose Acquisition price Ordinary shares of Ideal Bike corporation $ 170,000
	Financial fair value through other comprehensive income-non-current

(Continued)

68

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• (ii) Loans and guarantee to Related Parties

December 31, 2020 and 2019, the related parties had provided a guarantee for loans taken out by the Group.

• (iii) Borrowings from Related Parties

The borrowings from related parties were as follows:

Related parties Related parties					2020		Interest payable
	The highest amount			Ending balance -	Rate - 2019	Interest expense -
	$ -						- Interest payable
		The highest amount		Ending balance -	Rate -	Interest expense -
	$ 3,163						-

• (iv) As of December 31, 2020 and 2019, other receivables raised due to collection and payment and various expense between the Group and related parties is $571 thousand and $765 thousand, respectively which classified account other receivables-related parties.

• (v) As of December 31, 2020 and 2019, donation to associates is $4,300 thousand and $4,900 thousand, respectively which are classified under the item “ Selling expenses and administrative expenses ”.

• (d) Key management personnel compensation

Key management personnel compensation comprised:

Short-term employee benefits	2020 $ 67,081	2019
		162,386

(Continued)

69

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(8) Pledged assets

The carrying values of pledged assets were as follows:

Pledged assets	Object	December 31, 2020 $ 407,228 1,833,072 138,885 3,302,485 48,000 55,733 165,400 $ 5,950,803	December 31, 2019
Land Building and construction Right-of-used assets Machinery and equipments Certificate of deposit (Note 1) Certificate of deposit (Note 2) Stock (Note 3)	Long-term borrowings Long-term borrowings Long-term borrowings Long-term borrowings Subsidiaries’ borrowings endorsement, Domestic (Foreign) sight L/C endorsement Bureau of Costoms’ endorsement, shipping, Center deposits, Letzer Industrial Park deposit and foreign workers’ deposit, Loung Te Industrial Park deposit Short-term borrowings		386,541 2,105,356 139,621 3,574,272 48,000 56,260 169,259
			6,479,309

(Note1) Classified into the account of “other Financial Assets-current”.

“ ” (Note2) Classified into the account of Refundable Deposits .

“ ” (Note3) Classified into the account of Investment accounted for using equity method .

(9) Significant commitments and contingencies:

• (a) As of December 31, 2020, the total amount of the significant machinery and equipment contracts signed by the Group was approximately $770,547 thousand, and the payment of $549,028 thousand was classified into “Property, Plant and Equipment” and “Prepayments for business facilities”.

• (b) The Group’s outstanding standby letter of credit are as follows:

USD JPY EUR	December 31, 2020 $ 623 $ 96,540 $ 264	December 31, 2019
		710
		422,127
		264

• (c) The Group and other 9 companies that are also shareholders of Taiwan International SecuritiesCo., Ltd. (hereinafter referred to as Taiwan International Securities), entered into an agreement with Capital Securities Corp. (hereinafter referred to as Capital Securities) stipulating that the issue of investor compensation for the dispute over the sale of GVEC private investment products within $173,000 thousand by employees of Taiwan International Securities in 2005 will be handled by Capital Securities as the priority; the remaining amount and risks will be dealt with by the company that signed of the agreement. However, the content and scope of "responsible processing" are not clearly defined, and the relevant cases are still in progress. Therefore, the Group is unlikely to be liable for compensation and should not have a significant impact on the Company's shareholders' equity.

(Continued)

70

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

• (d) The Group filed a lawsuit against the client defaulting payment due to product quality during June 2013. The case was filed by the People's court of Suzhou City, Jiangsu Province, China on December 17, 2015. The court adjudicated that the client lost and was required to pay the payment to the Group plus interest, and bear litigation costs. In October 2018, the default payment has been directly enforced by the court, and the client has paid $4,769 thousand. The Group has filed another lawsuit in Taiwan for the remaining account receivable of $20,754 thousand, and on September 11, 2019, the Group lost the lawsuit by adjudicated made by Taiwan Shilin District Court on March 25, 2020. Appeal was filed by a lawyer appointed by the Group. The Group wrote-off all the remaining account receivable.

(10) Losses Due to Major Disasters:None

(11) Subsequent Events:

Except for note 6(i) and (u), due to the coordination with Shanghai City government in China for the land project, the subsidiary Shanghai Unitech Electronics Co., Ltd. received CNY 310,002 thousand for rightof-used for land, relocation, and employee severance comprehensive on February, 2021.

(12) Other:

• (a) A summary of current-period employee benefits, depreciation, and amortization, by function, is as follows:

By funtion By item	2020	2020		2019	2019	2019
	Cost of Sale	Operating Expense	Total	Cost of Sale	Operating Expense	Total
Employee benefits
Salary	2,885,990	994,580	3,880,570	3,372,958	933,870	4,306,828
Labor and health insurance	279,707	50,157	329,864	308,849	47,584	356,433
Pension	131,662	39,147	170,809	191,303	43,754	235,057
Remuneration of directors	-	5,485	5,485	-	27,887	27,887
Others	125,794	57,621	183,415	138,512	61,377	199,889
Depletion	1,432,578	83,257	1,515,835	1,599,298	90,856	1,690,154
Amortization	5,153	17,288	22,441	2,181	11,611	13,792

• (b) Regarding to assessment of impact on Coronavirus, the Group has influence by the Coronavirus in 2020, which caused the part of delayed. As the year of December 31, 2020, the operating is recoverable gradually. As the impact on the Coronavirus is still uncertainty, the Group subsidy and salary subsidy from government. The Group is expected to minimize the influence and will stay tared for updates of the event to make in-time assesument.

(Continued)

71

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(13) Other disclosures:

• (a) Information on significant transactions:

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Group:

• (i) Loans to other parties: None.

• (ii) Guarantees and endorsements for other parties:

No.	Name of guarantor	Counter-party of guarantee and endorsement	Counter-party of guarantee and endorsement	Limitation on amount of guarantees and endorsements for a specific enterprise	Highest balance for guarantees and endorsements during the period	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period	Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements	Parent company endorsements/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsements/ guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of companies in Mainland China
		Name	Relationship with the Company
0	The Company	Unitech BVI	2	4,835,900	1,343,940	1,069,150	320,115	38,000	% 11.05	7,737,440	Y	N	N
0	The Company	Shanghai Unitech Electronics Co., Ltd.	2	4,835,900	752,400	598,500	598,500	-	% 6.19	7,737,440	Y	N	Y
0	The Company	Shanghai Unitech Electronics (Nantong) Co., Ltd.	2	4,835,900	1,317,000	739,600	569,600	-	% 7.65	7,737,440	Y	N	Y
1	Shanghai Unitech Electronics Co., Ltd.	Shanghai Unitech Electronics (Nantong) Co., Ltd.	2	1,232,799	2,532,000	2,532,000	2,143,218	-	% 102.69	4,931,196	Y	N	Y

Note1:The numbers filled in for the loans provided by the Company or subsidiaries are as follows:

• (a) The Company is ‘0’.

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

Note2: 7 forms of relationships in which corporate guarantees exist are defined as follows:

• (a) Entities have business relations with Company.

• (b) The Company directly or indirectly holds more than 50% of voting shares of its subsidiaries.

• (c) Investees directly or indirectly own more than 50% of voting shares of the Company

• (d) The Company directly or indirectly holds 90% of voting shares of its subsidiaries.

• (e) Entities have construction contract agreements with the Company.

• (f) The reason for the Company jointly invested in the entities is to provide proportionate endorsements.

• (g) The Company has contractual pre-sold home agreements with its related parties under the Consumer Protection Law.

• Note3:The Company’s aggregate amount allows endorsement or guarantee that does not exceed 50% of its net worth in December 31, 2020.

• Note4:The Company’s aggregate amount allows endorsement or guarantee that does not exceed 80% of its net worth in December 31, 2020.

Note5:The Subsidiaries aggregate amount allows endorsement or guarantee that does not exceed 200% of its net worth in December 31, 2020.

• (iii) Securities held as of December 31, 2020 (excluding investment in subsidiaries, associates and joint ventures):

Name of holder	Category and name of security	Relationship with company	Account title	Ending balance	Ending balance	Ending balance	Ending balance	Highest Percentage of ownership (%)	Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
The Company	Capital Securities Corp.	-	Financial assets at FVTOCI-noncurrent	4,898	66,367	% 0.23	66,367	% -
The Company	Ideal Bike Corporation	Related party	Financial assets at FVTOCI-noncurrent	34,000	401,200	% 13.98	401,200	% -
DA-TAI Investment Co., Ltd.	Capital Securities Corp.	-	Financial assets at FVTOCI-noncurrent	3,405	46,137	% 0.16	46,137	% -
DA-TAI Investment Co., Ltd.	ANCAD, INC	-	Financial assets at FVTOCI-noncurrent	26	1,700	% 2.02	1,700	% -
DA-TAI Investment Co., Ltd.	Taiwan First Biotechnology Inc	-	Financial assets at FVTOCI-noncurrent	5,306	93,636	% 4.00	93,636	% -

(Continued)

72

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock:

Name of company	Category and name of security	Account name	Name of counter-party	Relationship with the company	Beginning Balance	Beginning Balance	Purchases (Note3)	Purchases (Note3)	Sales (Note3)	Sales (Note3)	Sales (Note3)	Sales (Note3)	Ending Balance	Ending Balance
					Shares	Amount	Shares	Amount	Shares	Price	Cost	Gain (loss) on disposal	Shares	Amount
Shanghai Unitech Electronics Co., Ltd.	Stocks of Shanghai Unitech Electronics (Nantong) Co., Ltd.	Investments accounted for using equity method	Note 5	-	-	1,587,028	-	864,462	-	-	-	-	-	2,451,490
Shanghai Unitech Electronics Co., Ltd.	Stocks of Shanghai Unitech Electronics (Nantong) Co., Ltd.	Investments accounted for using equity method	Note 6	-	-	118,336	-	701,984	-	-	-	-	-	820,320
Shanghai Unitech Electronics (Nantong) Co., Ltd.	Structured deposit	Financial assets at fair value through profit or loss – current	Bank of Communications	None	-	-	-	131,800 (Note 8)	-	131,894 (Note 8)	131,800 (Note 8)	94 (Note 8)	-	-

Note1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities.

Note2: Fill in the columns the counterparty and relationship if securities are accounted for under the equity method; otherwise leaves the columns blank.

Note3: Individual securities acquired or disposed of with accumulated fair value exceeding the lower of NT$300 million or 20% of the capital stock.

Note4: Paid-in capital refers to the company’s paid-in capital. If the issuer’s stock has no par value or the par value per share is not NT$10, the transaction amount of 20% of the paid-up capital shall be attributed to the balance sheet Calculated based on the 10% equity of the owner of the parent company.

Note5: Issuance of ordinary shares of cash.

Note6: Use machinery and equipment as investment.

Note7: The amount was eliminated in the consolidated financial statements.

Note8: Transaction currency in thousands of RMB.

• (v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.

• (vi) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.

• (vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$300 million or 20% of the capital stock:

Name of company	Related party	Nature of relationship	Transaction details	Transaction details	Transaction details	Transaction details	Transactions with terms different from others	Transactions with terms different from others	Notes/Accounts receivable (payable)	Notes/Accounts receivable (payable)	Note
			Purchase/ Sale	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
Unitech BVI	The Company	Parent company	Sale	316,177	% 100.00	The collection terms are based on the loose funds.	-	The collection terms are based on the loose funds.	-	-%	Note
Unitech BVI	Shanghai Unitech Electronics Co., Ltd.	Subsidiary	Purchase	250,307	% 81.10	The payment terms are based on the loose funds.	-	The payment terms are based on the loose funds.	-	-%	Note
The Company	Unitech BVI	Subsidiary	Purchase	316,177	% 4.38	The payment terms are based on the loose funds.	-	The payment terms are based on the loose funds.	-	-%	Note
Shanghai Unitech Electronics Co., Ltd.	Unitech BVI	Subsidiary	Sale	250,307	% 16.73	The collection terms are based on the loose funds.	-	The collection terms are based on the loose funds.	-	-%	Note
The company	Shanghai Unitech Electronics (Nantong) Co., Ltd.	Subsidiary	Purchase	1,287,583	% 17.85	The payment terms are based on the loose funds.	-	The payment terms are based on the loose funds.	(855,971)	28.12%	Note
Shanghai Unitech Electronics (Nantong) Co., Ltd.	The company	Parent comapny	Sale	1,287,583	% 57.56	The collection terms are based on the loose funds.	-	The collection terms are based on the loose funds.	855,971	67.69%	Note

(Continued)

73

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

Name of company	Related party	Nature of relationship	Transaction details	Transaction details	Transaction details	Transaction details	Transactions with terms different from others	Transactions with terms different from others	Notes/Accounts receivable (payable)	Notes/Accounts receivable (payable)	Note
			Purchase/ Sale	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
Shanghai Unitech Electronics Co., Ltd.	Shanghai Unitech Electronics (Nantong) Co., Ltd.	Subsidiary	Purchase	129,419	% 19.75	The payment terms are based on the loose funds.	-	The payment terms are based on the loose funds.	(19)	3.62%	Note
The Company	Shanghai Unitech Electronics Co., Ltd.	Subsidiary	Purchase	179,665	% 2.49	The payment terms are based on the loose funds.	-	The payment terms are based on the loose funds.	-	-%	Note
Shanghai Unitech Electronics (Nantong) Co., Ltd.	Shanghai Unitech Electronics Co., Ltd.	Subsidiary	Sale	129,419	% 5.79	The collection terms are based on the loose funds.	-	The collection terms are based on the loose funds.	19	-%	Note
Shanghai Unitech Electronics Co., Ltd.	Shanghai Unitech Electronics (Nantong) Co., Ltd.	Subsidiary	Sale	475,412	% 31.77	The collection terms are based on the loose funds.	-	The collection terms are based on the loose funds.	-	-%	Note
Shanghai Unitech Electronics (Nantong) Co., Ltd.	Shanghai Unitech Electronics Co., Ltd.	Subsidiary	Purchase	475,412	% 22.87	The payment terms are based on the loose funds.	-	The payment terms are based on the loose funds.	-	-%	Note
Shanghai Unitech Electronics Co., Ltd.	The Company	Parent company	Sale	179,665	% 12.01	The collection terms are based on the loose funds.	-	The collection terms are based on the loose funds.	-	-%	Note

Note: The inter-company transactions have been eliminated in the consolidated statements.

• (viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

Name of company Shanghai Unitech Electronics (Nantong) Co., Ltd. T	Counter-party	Nature of relationship	Ending balance	Turnover rate	Overdue Amount	Amounts received in subsequent period	Allowance for bad debts	Note
	he Company	Parent company	855,971	3.01	-	16,487 (CNY 3,858 thousand)	-	Note

Note: The inter-company transactions have been eliminated in the consolidated statements.

(ix) Trading in derivative instruments: None.

(x) Business relationships and significant intercompany transactions:

No.	Name of company	Name of counter-party	Nature of relationship (Note 1)	Intercompany transactions	Intercompany transactions	Intercompany transactions	Intercompany transactions
				Account name	Amount	Trading terms	Percentage of the consolidated net revenue or total assets
0	The Company	Unitech BVI	1	Purchase	316,177	The payment terms are based on the loose funds.	2.20%
0	The Company	Shanghai Unitech Electronics (Nantong) Co., Ltd.	1	Purchase	1,287,583	The payment terms are based on the loose funds.	8.95%
0	The Company	Shanghai Unitech Electronics (Nantong) Co., Ltd.	1	Accounts payable	855,971	The payment terms are based on the loose funds.	3.59%
0	The Company	Shanghai Unitech Electronics Co., Ltd.	1	Purchase	179,665	The payment terms are based on the loose funds.	1.25%
1	Unitech BVI	Shanghai Unitech Electronics Co., Ltd.	3	Purchase	250,307	The payment terms are based on the loose funds.	1.74%
2	Shanghai Unitech Electronics Co., Ltd.	Shanghai Unitech Electronics (Nantong) Co., Ltd.	3	Purchase	129,419	The payment terms are based on the loose funds.	0.90%
3	Shanghai Unitech Electronics (Nantong) Co., Ltd.	Shanghai Unitech Electronics Co., Ltd.	3	Operating expense	34,165	Consultant fee	0.24%
3	Shanghai Unitech Electronics (Nantong) Co., Ltd.	Shanghai Unitech Electronics Co., Ltd.	3	Purchase	475,412	The payment terms are based on the loose funds.	3.30%
2	Shanghai Unitech Electronics Co., Ltd.	Shanghai Unitech Electronics (Nantong) Co., Ltd.	3	Equipment	1,567,631	Investment in equipment	6.58%

(Continued)

74

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

No.	Name of company	Name of counter-party	Nature of relationship (Note 1)	Intercompany transactions	Intercompany transactions	Intercompany transactions	Intercompany transactions
				Account name	Amount	Trading terms	Percentage of the consolidated net revenue or total assets
2	Shanghai Unitech Electronics Co., Ltd.	Shanghai Unitech Electronics (Nantong) Co., Ltd.	3	Accumulated depreciation	867,310	Investment in equipment	3.64%
2	Shanghai Unitech Electronics Co., Ltd.	Shanghai Unitech Electronics (Nantong) Co., Ltd.	3	Loss on disposal of property, plant and equipment	79,096	Investment in equipment	0.55%
2	Shanghai Unitech Electronics (Nantong) Co., Ltd.	Shanghai Unitech Electronics Co., Ltd.	3	Construction in progress	621,225	Investment in equipment	2.61%
2	Shanghai Unitech Electronics Co., Ltd.	Shanghai Unitech Electronics (Nantong) Co., Ltd.	3	Equipment	1,096,586	Sale of equipment	4.60%
3	Shanghai Unitech Electronics Co., Ltd.	Shanghai Unitech Electronics (Nantong) Co., Ltd.	3	Accumulated depreciation	630,754	Sale of equipment	2.65%
3	Shanghai Unitech Electronics (Nantong) Co., Ltd.	Shanghai Unitech Electronics Co., Ltd.	3	Construction in progress	465,832	Sale of equipment	1.95%

Note 1: Company numbering as follow:

(1). Parent company- 0

(2). Subsidiaries starting from 1.

Note 2: Relationship:

(1). Transaction between the Parent Company and the subsidiary.

(2). Transaction between the subsidiary and the Parent Company.

(3). Transaction between the subsidiary and the subsidiary.

(b) Information on investees:

The following is the information on investees for the years ended December 31, 2020 (excluding information on investees in Mainland China):

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Balance as of December 31, 2020	Balance as of December 31, 2020	Balance as of December 31, 2020	Highest Percentage of wnership	Net income (losses) of investee	Share of profits/losses of investee	Note
				December 31, 2020	December 31, 2019	Shares (thousands)	Percentage of wnership	Carrying value
The Company	Unitech BVI	British Virgin Islands	Reinvested inShanghai Unitech Electronics Co., Ltd. sales of PCB	2,414,937	2,414,937	3.75	% 100.00	2,343,979	% -	(339,678)	(335,123)	Note 1
The Company	DA-TAI Investment Co., Ltd.	Taiwan	General investment	820,019	820,019	82,000	% 100.00	1,116,451	% -	(62,116)	(62,116)	Note 1
The Company	Schmidt Scientific Taiwan Ltd.	Taiwan	Manufacture and sales of medical equipment, electronic components, and optical instruments	-	346,933	-	% -	-	% -	2,199	1,324	Note 1 and 2
The Company	Fulltech Fiber Glass Corp.	Taiwan	Reinvested inShanghai Unitech Electronics Co., Ltd. sales of PCB	37,632	37,632	2,540	% 0.61	40,206	% -	(485,175)	(2,750)	-
The Company	Unitech Electronics International (HK)Limited	Hong Kong	Reinvested inShanghai Unitech Electronics Co., Ltd. sales of PCB	153,980	153,980	5,000	% 6.10	138,103	% -	(362,186)	(22,085)	Note 1
DA-TAI Investment Co., Ltd.	Fulltech Fiber Glass Corp.	Taiwan	Manufacturing of glass and glass products	600,684	600,684	57,734	% 13.82	955,432	% -	(485,175)	(62,463)	-
Schmidt Scientific Taiwan Ltd.	Schmidt Taiwan International Ltd.	British Virgin Islands	Sales of medical equipments, electronic products and solar equipment	-	18,268	-	% -	-	% -	-	-	Note 1 and 2
Schmidt Taiwan International Ltd.	Schmidt Technology Inc.	British Cayman Islands	Sales of medical equipments, electronic products and solar equipment	-	16,894	-	% -	-	% -	-	-	Note 1 and 2
Unitech BVI	Unitech Electronics International (HK)Limited	Hong Kong	Reinvested inShanghai Unitech Electronics Co., Ltd. sales of PCB	2,480,927	2,480,927	77,000	% 93.90	2,661,758	% -	(362,186)	(340,101)	Note 1

Note 1: The amount was eliminated in the consolidated financial statements except using the equity method.

Note 2: The Company has disposed all shares which the Company held on January 15, 2020.

(Continued)

75

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(c) Information on investment in mainland China:

(i) The names of investees in Mainland China, the main businesses and products, and other information:

Name of investee	Main businesses and products	Total amount ofpaid-in capital	Method of investment	Accumulated outflow of investment from Taiwan as of January 1, 2019	Investment flows	Investment flows	Accumulated outflow of investment from Taiwan as of December 31, 2020	Net income (losses) of the investee	Percentage of ownership	Highest percentage of ownership	Investment income (losses)	Book value	Highest Percentage of ownership	Accumu-lated remittance of earnings in currentperiod
					Outflow	Inflow
Shanghai Unitech Electronics Co., Ltd.	Manufacturing and sale of PCB	2,474,777	( 2 )	2,480,927	-	-	2,480,927	(335,339)	100.00%	-%	(335,339)	2,465,598	-	-
Shanghai Unitech Electronics (Nantong) Co., Ltd.	Manufacturing and sale of PCB	3,639,130	( 3 )	367,320 (Note 4)	-	-	367,320 (Note 4)	(256,965)	100.00%	-%	(256,965)	3,363,320	-	-

Note 1:Investments are made through one of three ways:

• (1) Direct investment from Manland China.

• (2) Indirect investment from third-party country.

• (3) Others.

Note 2:The recognition of gain or loss on investment based on the financial report which was assured by R.O.C. Accountant.

Note 3:The amount was eliminated in the consolidated financial statements.

Note 4:Including retained earnings transferred to the capital increase of USD 7,000 thousand.

(ii) Limitation on investment in Mainland China:

CompanyName	Accumulated Investment in Mainland China as of December 31, 2020	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment
The Company	2,987,438 (USD 104,896 thousand) (Note4)	2,987,438 (USD 104,896 thousand)	5,803,080

(iii) Significant transactions:

The significant inter-company transactions with the subsidiaries in Mainland China, which were eliminated in the preparation of consolidated financial statements, are disclosed in “Information on significant transactions”.

(d) Major shareholders:

Major shareholders:
Shareholding Shareholder’s Name	Shares	Percentage
GUO-LING INVESTMENT CO. LTD	36,950,280	% 5.96

(Continued)

76

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(14) Segment information:

(a) Information about reportable segments and their measurement and reconciliations

The main business for the Group are produce and sell printed circuit boards. Therefore, there is no financial information for segment to disclose.

The Group’s operating segment information and reconciliation are as follows:

Revenue: Revenue from external customers Intersegment revenues Total revenue Reportable segment profit or loss Reportable segment assets Revenue: Revenue from external customers Intersegment revenues Total revenue Reportable segment profit or loss Reportable segment assets		2020	2020	Total 14,386,972 - 14,386,972 (1,583,127) 23,834,297 Total 22,418,326 - 22,418,326 2,276,185 25,013,210
	Domestic PCB and other $ 13,040,613 17,379 $ 13,057,992 $ (1,231,392) $ 20,159,836	Oversea PCB Reconciliation and elimination 1,346,359 - 1,784,258 (1,801,637) 3,130,617 (1,801,637) (351,735) - 8,131,245 (4,456,784) 2019
	Domestic PCB and other $ 20,357,198 57,722 $ 20,414,920 $ 2,070,811 $ 22,891,496	Oversea PCB 2,061,128 2,653,764 4,714,892 205,374 6,467,103	Reconciliation and elimination - (2,711,486) (2,711,486) - (4,345,389)

(b) Geographic information

In presenting information on the basis of geography, segment revenue is based on the geographical location of customers and segment assets are based on the grographical location of the assets.

Geographical information Revenue from external customers: Taiwan China United States Other countries	2020 $ 2,856,517 3,920,169 3,097,146 4,513,140 $ 14,386,972	2019
		3,774,592 11,345,988 2,020,420 5,277,326
		22,418,326

(Continued)

77

Unitech Printed Circuit Board Corporation and Subsidiaries Notes to the Consolidated Financial Statements

(c) Major customers

A customer of PCB division B customer of PCB division C customer of PCB division D customer of PCB division E customer of PCB division Total	2020 $ 2,083,779 2,022,574 1,016,719 215,206 1,917,241 $ 7,255,519	2019
		5,486,026 3,004,704 1,268,866 2,012,471 779,289
		12,551,356