UNITECH - Annual Report 2020 | FinancialReports.eu

Stock Code: 2367

Information on the Annual Reports of the Company is available at the following website (Market Information Post Service: https://mops.twse.com.tw/mops/web/index)

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Unitech Printed Circuit Board Corp.

2020

Annual Report

Printed on 2021.04.30

I. The titles and telephone numbers of the Company Spokesperson and Acting Spokesman:

Name: Chin-Fang Wu

Title: Spokesperson

Telephone: (02) 2268-5071

E-mail: [email protected]

Name: Jason Chou

Title: Acting Spokesman Telephone: (02) 2268-5071

E-mail: [email protected]

II. Company address and telephone:
(1) Address: Plant No. 1: No. 62, Zhongshan Road, Tucheng Industrial Park, Tucheng District, New Taipei

Plant No. 2: No. 3, Lane No. 4, Zhongshan Road, Tucheng Industrial Park, Tucheng Direct, New Taipei Plant No. 3: No. 12, Datong Street, Tucheng Industrial Park, Tucheng District, New Taipei Plant No. 4: No. 6, Zhongshan Road, Tucheng Industrial Park, Tucheng District, New Taipei Yilan Plant: No. 36, Dingping Road, Dinliao Li, Suao Township, Yilan County Yilan Branch: No. 16, Ligong 1[st] Road Section II, Wujie Town, Yilan County

(2) Telephone: Plant No. 1: (02)2268-7826

Plant No. 2: (02)2268-5071 Plant No. 3: (02)2268-0580 Plant No. 4: (02)2268-5071 Yilan Plant: (03)970-5818

III. Name, address and telephone of Share Registrar

(1) Name: Office of Share Registrar
(2) Address: 12F, No. 98, Tunhua South Road Section II, Taipei
(3) Telephone:(02)2705-1333
(4) Website: https://www.pcbut.com.tw
IV. Names of CPAs, name of CPA office, address and telephone:
(1) Name: Chuang Chun-Wei, CPA; Wang Ching-Sung, CPA
(2) Name of CPA office: KPMG Taiwan
(3) Address: 68F, No. 7, Xinyi Road Section V, Taipei (Taipei 101)
(4) Telephone: (02)8101-6666
(5) Website: http://www.kpmg.com.tw
V. Names of the overseas exchanges for the listing of stock for trading, and means of inquiry of related securities traded overseas: None.
VI. Official website of the Company: https://www.pcbut.com.tw

Unitech Printed Circuit Board Corp.

Table of content

Page

One. A Message to Shareholders ............................................................................................................................................................. 1 Two. Company Profile .............................................................................................................................................................................. 7

Three. Report on Corporate Governance ................................................................................................................................................ 9	Three. Report on Corporate Governance ................................................................................................................................................ 9
I.	Company Organization ........................................................................................................................................................ 9
II.	Profiles of the Directors, Supervisors, President, Vice Presidents, and heads of the functions and branches ...................... 11
III.	Remuneration to the Directors, Supervisors, President, and Vice Presidents in the previous period. ................................18
IV.	The state of corporate governance ....................................................................................................................................22
V.	Information of audit fee for Independent Auditors ...........................................................................................................49
VI.	Information on replacement of Independent Auditors ......................................................................................................50
VII.	The Chairman, President, Chief Financial Officer, or Accounting Manger, who has been employed by the CPA
	firm or its affiliates in the previous period .........................................................................................................................51
VIII.	The changes in the transfer or pledge of equity shares by Directors, managers, and shareholders holding more
	than 10% of the shares issued by the Company in the previous period to the day this report was printed. .........................51
IX.	The top 10 shareholders by shareholding who are related-parties, or spouse, kindred within the 2nd tier to one
	another. ...............................................................................................................................................................................52
X.	The quantity of shares held by the Company, Directors of the Company, managers, and business entities under the
	direct or indirect control of the Company on particular investee company, the ratio of overall shareholding in
	combination in the calculation. ............................................................................................................................................54
Four. Capitalization.................................................................................................................................................................................................. 54
I.	Source of capital stock .......................................................................................................................................................54
II.	Component of shareholders ............................................................................................................................................... 56
III.	Dispersion of equity ...........................................................................................................................................................56
IV.	List of dominant shareholders ........................................................................................................................................... 56
V.	Market price, net value, earnings, dividend per shares in the last 2 years and related information......................................57
VI.	Dividend policy and implementation .................................................................................................................................57
VII.	The influence of stock dividend discussed in the Shareholders Meeting of this year on the operation performance and
	earnings per share. ............................................................................................................................................................... 58
VIII.	Remuneration to the employees and Directors .................................................................................................................. 58
IX.	Repurchase of shares issued by the Company ....................................................................................................................58
X.	Corporate bonds (including overseas corporate bonds)........................................................................................................58
XI.	Preferred shares ..................................................................................................................................................................58
XII.	Overseas depository receipts ..............................................................................................................................................58
XIII.	Employee Stock Options ....................................................................................................................................................58
XIV.	Restricted Employee New Shares ......................................................................................................................................58

XV.	Mergers or acceptance of assigned shares issued by other companies .................................................................................58
XVI. The Implementation of the Fund Utilization Plan ................................................................................................................58
Five. Operation Highlight ......................................................................................................................................................................59
I.	Content of business ............................................................................................................................................................59
II.	Market, production and sale ...............................................................................................................................................61
III.	Number of employees, average years of service seniority, average age, and education levels in the last 2 years and to
	the day this report was printed. ............................................................................................................................................67
IV.	Expenditure on environmental protection ..........................................................................................................................67
V.	Labor-Management Relation ..............................................................................................................................................68
VI.	Important Contracts ..............................................................................................................................................................71
Six. Financial Position .........................................................................................................................................................................72
I.	The Condensed Balance Sheet and Comprehensive Income Statements of the last 5 years, and the names of the
	Independent Auditors and Audit Opinions. ........................................................................................................................72
II.	Financial Analysis of the last 5 years ...................................................................................................................................77
III.	Audit Committee Review Report on Financial Statements of the previous period ..............................................................79
IV.	Financial Statements and Auditors’ Report of the previous period ....................................................................................81
V.	Separate Financial Statements of the previous period audited by Independent Auditors ...................................................159
VI.	Any insolvency to the Company and its affiliates in the previous period to the day this report was printed, where
	applicable, and the influence on the financial position of the Company ............................................................................238
Seven. Review of financial position and financial performance, and assessment of risks
I.	Comparative Analysis of Financial Position ....................................................................................................................238
II.	Comparative Analysis of Financial Performance .............................................................................................................238
III.	Analysis of Cash Flows ....................................................................................................................................................238
IV.	Major capital spending in the previous period and its influence on financial position and operation ..............................239
V.	The policy of direct investment in the previous period, the main reason for profit or loss, corrective action plan, and the
	investment plan in the year ahead. .....................................................................................................................................240
VI.	Analysis and assessment of risks ........................................................................................................................................240
VII.	Additional information .....................................................................................................................................................241
Eight. Important information ...............................................................................................................................................................243
I.	Profiles of affiliates ..........................................................................................................................................................243
II.	Offering of securities through private placement in the previous period to the day this report was printed. .....................247
III.	The holding or disposals of shares issued by the Company by subsidiaries in the previous period to the day this report
	was printed. ......................................................................................................................................................................247
IV.	Supplementary information ............................................................................................................................................247
Nine. The occurrence of events as stated in Subparagraph 2 of Paragraph 3 under Article 36 of the Securities and Exchange Act in
the previous period to the day this report was printed that significantly affected the shareholders equity or stock price of the
Company ....................................................................................................................................................................................247

One. A Message to Shareholders

Dear Shareholders,

COVID-19 has turned the whole world upside down in all walks of lives in 2020. The rule of the games for all kinds of economic activities changed all of a sudden. The rising rate of infection worldwide seemed to be the order of the day. Discontinuation of operation and quarantine of cities and metropolises directly hit all kinds of economic activities hardly. Different forms of demand plummeted with the service sector being affected the most. It was followed by consumer electronics, which is not regarded as daily necessities. The stunning appreciation of TWD to almost 5.61% in one year was record high in three years. The relocation of Champward (Shanghai) was unveiled at the time of high rate infection of pandemic and completed in July 2020. This move intensified the impairment of capacity. The 3 aspects of impact as mentioned trimmed off much of the revenue by 36% in total. This is the first time that Unitech has suffered such severity of loss ever since its establishment.

Revenue from FPCB dropped by about 50% in 2020. Perhaps two major reasons resulted in the decline. First of all, rigid-flex board is mainly used in consumer electronics with wearables in particular. Spending on consumer electronics at the high tide of the pandemic is unnecessary as compared with the spending on daily necessities and supplies necessary for the combating the pandemic. As such, the decline was significant. Secondly, it is the falling price of rigid-flex board. The customer end has great advantage in bargaining power against the supplier end under the pandemic time that the average sale price last year dived.

Automotive sale was also sluggish as was the previous year. The continuation of the China-US trade war echoed with the quarantine of cities or the entire territory in many countries hit automotive sale hardly for 2 consecutive years. As compared with 2019, automotive sale in 2020 was further down by 17%. Unitech has committed significant resources in the advanced driver assistance system (ADAS) and is resistant to decline, but cannot withstand the overall decline in sale. The result was further down in revenue.

The launch of massive vaccination in 2021 helps to contain the pandemic to a certain extent. It is expected that most economic activities will return to normal incrementally, and economic recovery in many countries will take place. Accordingly, the infrastructure under 5G, terminal devices and mobile phones, wearables (AR/VR), IoV, the rise of Stay at Home Economics (NB) under the pandemic, will resume to normal. Yet, the mutant variants and the excessive monetary easing policies unleashed by most countries during the pandemic spread may back slash the momentum for growth. The overall economic performance in 2020 stayed low. Recovery and substantial growth is expected in 2021. But we still need time to resume to our normal level of development as was in the past. Unitech has its place in the application end of the above high-end products, and could picky up normal growth as expected once

economic recovery takes place. Unitech will side with the customers as usual in 2021 for joint development of market and solutions for problems, and supply the customers with the best solutions in order to transcend to the environmental friendly and sustainable ecological circle where all participants are winners. The management team has already planned for development in the long run from 2021 onward and starts to take action. It is expected that Unitech will emerge as a vital participant in 5G, vehicle-mounted devices and many other advanced items for stable growth.

Financial Result and Business Report in 2020

In 2020, Unitech had consolidated revenue amounting to NT$14.4 billion or 36% decline from the same period of 2019. Consolidated net loss after taxation amounted to (NT$1.435 billion). Consolidated net loss after taxation attributable to the parent company amounted to (NT$1.436 billion).

Separate revenue amounted to NT$1.31 billion or a decline of 35% from the same period of 2019.

Business Plan of 2021

Continue to increase the proportion of niche products, expand the client base for better revenue and further growth.
(1). Adjust the ratio of product line capacity to meet the change in the demand of key customers in rigid-flex board design for filling the short-term vacant capacity of rigid-flex board and mitigate the impact brought about by design change.
(2). Make the best effort to development new customers, target at customers of high-ten product lines, introduce more customers of vehicle-mounted board, high-end NB, expanded frequency and high-speed PCB product lines.
(3). Increase the proportion of product application types in the advent of the 5G mobile communications for diversification of risk and stable growth.
R&D in product technologies: further the development of materials for application to high-end products, development of high frequency, high-speed, special copper foil and process fluid required for 5G, and launch to mass production. Further to satisfying the needs of the customers in product features, the Company will go for the best combination of cost.
Capacity expansion: in light of the introduction of new materials and new product portfolio in 2021, the Company will appropriately expand the capacity at the bottle-neck station for assurance of maximum output.
Continue the inception of automated production and process refinement plan.
Continue smart manufacturing to upgrade production efficiency.
Introduce the new ERP system of SAP to the Nantong Plant which can help to gear up with key

customers seamlessly under eTrade and could help to integrate the ERP systems between Nantong and Taipei.

The flooding of capital all over the world weakened the USD. The Company will make appropriate financial plan to reduce exchange risk.

Development Strategy in the future

Macroeconomic Factors:

Most countries unveiled plans for stimulating economic growth and the monetary easing policy in the wake of the pandemic, and started to launch massive vaccination in 2021. This will help to contain the spread of the pandemic and global economy is expected to pick up momentum significantly. According to the latest forecast of the OECD, global economic growth will achieve at 5.6% in 2021. Growth in the USA is expected at 6.5% while growth in the G20 is expected at 6.2% (5.9% for France, 5.1% for the UK, and 3% for Germany). Growth in Mainland China is expected at 7.8%, Japan at 2.7%, and South Korea at 3.3%. According to the data released by Directorate-General Of Budget, Accounting and Statistics of the Republic of China in February, economic growth in Taiwan is expected at 4.64%.

External Competitive Environment:

Demand:

Driven by the development of electric car and Morot Vehicle AutoDriving Electronics, the production value of automotive PCB continued to move upward. However, the automotive market withered over the years due to the China-US trade war and the pandemic, with delayed the growth in this area. The direction for the development of the application of automotive electronics is clear. With years of effort, the direction for the design of high-end PCB by Unitech is congruent with the direction of corporate development. As such, Unitech will continue to commit further effort in high-end automotive PCB and seek to emerge a a major supply in this area of business with promising growth.

5G mmWavwe mobile communication is an area of high potential, as the problem confronting nmWavwe includes material and PCB technology, which is in an high-end area. It was echoed with the physical feature of high dissipation and low penetration rate that small base stations for NR (new radio) and the broadband optical module market, which should have been prospective is now in a state of stagnancy. Unitech holds that the commercial running of 5G will be another wave of opportunity for driving up PCB growth, and will continue to operate in related areas. Once the time for 5G mmWave for commercial running has come, the direction for the development of mmWave could be ascertained. Supply:

The rise of the red supply chain over the years made some customers intentionally develop more competitors so as to enhance their bargaining position. With the abundance of capital and policy subsidy, PCB firms in Mainland China are in a much better position in capacity expansion and scale of investment in advanced production process equipment than the PCB firms of Taiwan. They tended use price cutting as the tool in competition. This is a problem for the firms of Taiwan and not good for development in the long run. Yet, they are just at the fermentation stage in the products required for 5G such as ABF, and high-end HDI. Therefore, Taiwan firms still have a chance to win in the competition.

Stimulated by the rapid development of AI, high-speed computer, 5G and automotive electronics and electric cars, the demand for high-speed and high-frequency board, and electric car battery grew significantly. As such, the supply of upstream materials for PCB has attracted much attention, including fiber glass fabric, copper foil and cooper foil board. All firms craved for developing related materials. This is particularly the case for copper foil under the crowding off effect of the rapid growth of electric car in market and the weak USD, which eventually pushed up the price of copper and the base board. The actual rise in price was echoed with the fear of shortage in supply, which resulted in prolonged delivery lead-time and higher risk of response. Unitech has maintained positive relations with its customers for long time and has acquired accurate information for material procurement timely that help to keep proper inventory level for timely delivery to the customers. Unitech has launched the one-stop design and manufacturing shortly after the confirmation with customer order, and could provide front-end design and timely solution for the customers. Further to recommendation in the professional manufacturing of PCB, Unitech also gives recommendation of the optimal cost combination for the customers in one-stop service for joint effort with the customers in creating a promising future and positive long-term cooperation where both sides are the winners.

Corporate Development Strategy:

1. Focus on the structure for profit for increasing the ratio of revenue from niche products.

(1) Vehicle mounted PCB:

The advent of the LEVEL 3 in AutoDriving application triggered the demand for advanced ADAS sensor components. It was echoed with the demand for IoV under the 5G environment that all kinds of electronic control systems in vehicles were adjusted to more power chips with stronger computing capacity. Accordingly, vehicle mounted PCB design advanced to the high-end HDI board particularly the wireless communication module for IoV and high-speed computer for response to different scenarios of the vehicle. All these have advanced to the domain of frontier technology. Automotive electronics required longer lead-time in development. Unitech projected that the ratio of revenue from this area will grow annually, which is good for the average unit price of vehicle mounted products. (2) High-end HDI Board:

In addition to the high-end HDI demand for smart phone, related base stations, mobile phone, cars, IoV, VR, AIP, and 5G NB related to the commercial running of 5G mobile communication have turned to high-end HDI design coincidentally. The pandemic in last year has delayed the development process already in place. It is expected that the post-pandemic era could be fruitful.

(3) Rigid-flex board:

Portable consumer electronics appeal to slim, light weight, short and small size with long life battery. rigid-flex board features light weight, slim, high-speed transmission, and low dissipation of signal transmission. Since it does not require a connector that gives an advantage in SMT and assembly to certain extent. Yet, the production of rigid-flex board is sophisticated and could not be made under homogeneity. Massive workforce is required to support the changes in the production process. In addition, the yield rate cannot be improved significantly in very short time that it entails high entrance barrier. With solid foundation in know-how, Unitech promotes rigid-flex board to different areas of product application for broadening its product line. This is particularly the case for smart wearables. It is expected that after the launch of commercial running of the 5G, there will be more and more product applications requiring high-end rigid-flex board. This is indeed relevant with the direction of development of Unitech in the future.

2. Careful assessment of market trend, active expansion of production capacity for niche products, introduction of automated and smart production in consideration of investment cost and economic performance.

The obvious trend of development of AI and in-depth learning made smart manufacturing the ultimate goal in the development of manufacturing. Production trend in the future must be oriented towards automation and AI for optimal production performance, enhancement of productivity and stability of product quality. Since smart manufacturing is still at the stage of AI assistance in production in general, high-level of customization is required for the equipment and software. This pushed up the production cost significantly. Furthermore, smart manufacturing is still at the learning stage that Unitech will continue to make effort in this area and observe the progress of all kinds of smart manufacturing in market. Unitech has already collected big data and advanced smart learning for learning and accumulate experience for its own automated inspection equipment. Once the advanced production system has properly been developed, Unitech is able to adjust its mode of production to align with different trends and provide the customers the best quality and solutions.

3. Continue to launch CSR and development of Green Unitech

The CSR of Unitech rested with “Green, Friendly, Innovation” and functions in line with its management mechanisms, honesty, and action through task force for a proper balance of operation performance, sustainability in development and social harmony in development. In the future, Unitech

will continue to upgrade its management capacity in green and value chain through research and development and innovation, and will set a model for the employees, community, and the society as a whole with positive influence. Unitech will continue to take care of its employees, protect the environment, and perform the best of corporate social responsibility.

In 2021, we will map out the development plan in the future. Basing on our performance of corporate social responsibility, we will use our corporate resources positively to develop high-end and niche products through the innovative and green mindset, diversify the risk of seasonal change in customer base, and develop frontier products and adjust the proportion of product line with a view to keeping control over the opportunity for development in market for long-term and stable development of the Company as our vision and mission.

May I ask for your care and support of Unitech as was in the past, and continue to give our management team encouragement and idea.

May I wish you are Good Health and Happiness!

Two. Company Profile

I. Company Profile:

(I) Date of incorporation: 1984.12.31

(II) Company history (to 2021.04.30):

December 1984	The Company was officially founded.
July 1985	Operation kicked off
June 1986	Accredited by CPI(COMPUTER PERIPHERAL INC ) as an exclusive PCB supplier.
October 1988	Mass production of 8-layer PCB commenced.
December 1993	Accredited with ISO 9002 by BSMI.
December 1995	Changed the company name into Unitech Printed Circuit Board Corp.
April 1997	Accredited with ISO 14001
December 1997	Stocks of the company listed at TWSE for trading.
June 1999	Accredited with the UL QS9000 of automotive industry of the USA in international quality system
December 1999	Capacity expansion at Tucheng Plant No. 2 completed.
October 2000	Equipment installation at Tucheng Plant No. 3 completed and launched to operation.
December 2001	Certified with TL9000
November 2002	6 Sigma & TPM review.
October 2003	ERP (Enterprise Resource Planning) launched.
December 2003	Summary merger with subsidiary Fulin Co., Ltd.
April 2004	Accredited with TS16949
March 2005	Construction of Tucheng Plant No. 4 kicked off (completed on 2006.03.23 and opened to service)
October 2005	Massive production and shipment of multiple-layer FPCB
November 2005	Accredited with OHSAS 18001 (DNV)
December 2005	Institution of product assurance system in conformity to the environmental protection requirements of
	ROHS/WEEE
June 2006	Accredited with ISO 14001:2004
July 2006	Accredited with Green Asus by ASUS
November 2006	Accredited with Sony GP by Sony
December 2006	Accredited with the IECQ QC080000
August 2007	Ground breaking for the construction of the photovoltaic energy plant in Lize, Yilan.
June 2008	Installation of equipment at the photovoltaic energy plant in Lize, Yilan was completed, and operated.
December 2008	Accredited with TOSHMS: 2007
August 2009	The photovoltaic energy plant in Lize, Yilan. was accredited with ISO9001: 2008
August 2009	Unitech GSM online
April 2010	Accredited with TS16949: 2009
May 2010	Accredited by PEGATRON/Unihan in PUreGMS
August 2010	The business unit of photovoltaic energy plant in Yilan was spinned off as Yaoxiang Optoelectronics
August 2010	Ground breaking for the construction of Yilan Plant No. 1
February 2011	Ground breaking for the construction of Yilan Plant No. 2

September 2011	Advocacy of the Corporate Social Responsibility System in conformity to EICC requirement.
December 2011	Yilan Plant was accredited with e ISO9001: 2008
December 2012	Acquisition of subsidiary Yaoxiang Optoelectronics and establishment of Yilan Branch Company
December 2013	Accredited with ISO50001:2011
December 2013	Accredited with IECQ QC080000:2012 revised version
January 2015	Accredited by BSI on CSR reporting of 2013.
January 2016	Accredited by BSI on CSR reporting of 2014.
June 2016	Accredited with Sony GP by Sony
November 2016	Accredited by BSI on CSR reporting of 2015.
January 2017	High -Frequency PCB products accounted for 10% of sale
June 2017	Accredited by BSI on CSR reporting of 2016.
December 2017	Yilan Plant was accredited with ISO9001: 2015
March 2018	Accredited with IATF16949: 2016
June 2018	Accredited by BSI on CSR reporting of 2016.
June 2018	Accredited with ISO 14001:2015 revised version
December 2018	Accredited with IECQ QC080000: 2017 revised version
June 2019	Accredited by BSI on CSR reporting of 2016.
September2019	Establishment of Shanghai Unitech Electronics (Nantong)Co., Ltd.
December 2019	Accredited with ISO50001:2018 revised version
May 2020	Accredited with RBA VAP Silver Award
June 2020	Accredited by BSI on CSR reporting of 2019

Three. Report on Corporate Governance

I. Company Organization
(I) Organizational Chart (as of 2020.04.30):

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

Board of Directors
Audit Committee
Audit Office
Compensation
Committee
Chairman
Legal Affairs Office
President
Safety and Health
Office
Executive Vice President
President Office
Information Administration Purchasing Finance and Marketing Process Environment Production Production Production Product Technology Quality Yilan Yilan Branch
Business Unit Business Unit Business Accounting Business Engineering Maintenance Business Control Business Engineering Business Assurance Factory Company
Unit Business Unit Business Business Unit Unit Business Unit Business Unit Business
Unit Unit Unit Unit Unit
Planning
Office
----- End of picture text -----

(II) Function of the functional units:

(1). Audit Committee: assist the Board of Directors to perform its function, and conduct review on: financial statements of the Company, the effectiveness of the internal control system, and material aspects of financial and business operation.
(2). Compensation Committee: assist the Board of Directors to carry out and assess the overall remuneration and benefit policy of the Company, and the remuneration to the Directors and managers.
(3). President Office: map out the business objective of the Company, administer the conduct of business and administrative affairs.
(4). Audit Office: Audit the business operations of the Company and provide recommendations for improvement.
(5). Safety and Health Office: Advocacy and management of occupational hazard prevention and occupational safety and health.
(6). Legal Affairs Office: responsible for the review and conduct of legal affairs, and is the law compliance administrative body of the Company.
(7). Planning Office: Integration and management of operation performance and advocacy and implementation of new business.
(8). Administration Business Unit: establishment of personnel management system, recruitment and training of human resources, salary and evaluation, and management of plant site, office equipment, company vehicles, and security guards.
(9). Purchasing Business Unit: The procurement and management of raw materials for the production and manufacturing of the Company.
(10). Finance and Accounting Business Unit: Allocation of funds, preparation of financial statements, shares registration and investor service, management of investee companies and related matters, bookkeeping, budgeting and account settlement, calculation of production cost and taxation.
(11). Marketing Business Unit: Development of new customers and the entry and review of related sale agreements, management and tracking of account receivables, product export and related matters, and the management of offshore warehousing.
(12). Process Engineering Business Unit: production, public facility maintenance and environmental management.
(13). Environment Maintenance Business Unit: anti-pollution, environmental protection, and energy saving planning.
(14). Production Business Unit: Management of product manufacturing quality, delivery, and production lines.
(15). Production Control Business Unit: Design of production plan, coordination of production and sale, warehouse management and bonded area management.
(16). Production Business Unit: design of new products and the supply of tools and jigs for the production processes.
(17). Product Engineering Business Unit: Regulation of production engineering and the standardization of materials and supplies.
(18). Technology Business Unit: development of new products and technologies.
(19). Quality Assurance Business Unit: Inspection of products, establishment of quality policy, quality regulations and standards.
(20). Yilan Factory: The PCB plant of the Company.
(21). Information Business Unit: Assessment, planning, development, installation, and maintenance of the computerized system, hardware and equipment of the Company.
(22). Yilan Branch Company: The photovoltaic energy business unit of the Company.

II. Profiles of Directors, President, Vice Presidents, and heads of functions and branches:

(I) Profiles of the Directors

Name, major work experience (education), adjunct position with the Company and other companies, date of election to (assumption of) office, tenure, initial date of office, the holding of shares by the Director, spouse, underage children or in the name of a third party: 2021.04.25

Title	Nationality of place of incorporation	Name	Gender	Date of election to office	Tenure	Initial date of office	Quantity of shareholding at the time of election to office	Quantity of shareholding at the time of election to office	Present holding of shares	Present holding of shares	Holding of shares by spouse, underage children atpresent	Holding of shares by spouse, underage children atpresent	Holding of shares in the name of a third party	Holding of shares in the name of a third party	Major work experience (education)	Adjunct positions with the Company and other companies	Other officers, Directors, or Supervisors who is a spouse or kindred within the 2ndtier.	Other officers, Directors, or Supervisors who is a spouse or kindred within the 2ndtier.	Other officers, Directors, or Supervisors who is a spouse or kindred within the 2ndtier.	Remark
							Quantity of shareholding	Proportion of shareholding	Quantity of shareholding	Proportion of shareholding	Quantity of shareholding	Proportion of shareholding	Quantity of shareholding	Proportion of shareholding			Title	Name	Relation
Chairman (Note 1)	ROC	Kuo-Ling Investment Co.,Ltd.		2018.6.12	3 years	1989.4.18	36,225,765	5.97	36,950,280	5.97	0	0	0	0	None	None	None	None	None
	ROC	Representative: Chang Yuan-Min	Male	2018.6.12	3 years	2012.6.19	--	--	966,332	0.16	0	0	0	0	Master of Electrical Engineering, Washington University, St. Louis, USA.	Chairman and Chief Strategy Officer, Unitech Printed Circuit Board Corp. Director of Unitech Electronics International Limited Chairman, Shanghai Unitech Electronics Co., Ltd. Chairman, Shanghai Unitech Electronics (Nantong) Co., Ltd. Director, Da-Tai Investment Co., Ltd. Director, Kuo-Ling Investment Co., Ltd. Director,Hung-LingInvestment Co.,Ltd.	Vice Chairman	Chang Yuan-Fu	Brother	The President of the Company is another person (Hung Hsien-Ching) Who is the top manager
Director	ROC	Kuo-Ling Investment Co.,Ltd.		2018.6.12	3 years	1989.4.18	36,225,765	5.97	36,950,280	5.97	0	0	0	0	None	None	None	None	None
	ROC	Representative: Chen Cheng-Hsiung	Male	2018.6.12	3 years	2011.3.4	--	--	5,006,465	0.81	547,989	0.09	0	0	Graduated from Department of Chemistry, National Normal University	Director of Unitech Electronics International Limited Director, Unitech Electronics International (HK) Limited Director, Shanghai Unitech Electronics Co., Ltd. Director, Shanghai Unitech Electronics (Nantong) Co., Ltd. Director, Da-Tai Investment Co., Ltd. Supervisor, Hung-Ling Investment Co., Ltd. Supervisor, Shang-Ling Investment Co., Ltd. Supervisor, Lian-Sheng Investment Co., Ltd. Supervisor, Deh Long Warehousing and StevedoringCo.,Ltd.	None	None	None
	ROC	Taichung Harbor Warehousing Stevedoring Co.Ltd.		2018.6.12	3 years	1998.6.22	1,225,003	0.20	655,143	0.11	0	0	0	0	None	None	None	None	None
Director	ROC	Representative: Chang Yuan-Fu	Male	2018.6.12	3 years	2012.6.19	--	--	3,718,781	0.60	60,392	0.01	0	0	Master of Industrial Engineering, University of Southern California MBA, College of Economics Management, National Tsing Hua University MBA, INSEAD	Vice Chairman and Executive Vice President, Unitech Printed Circuit Board Corp. Director, Taichung Harbor Warehousing Stevedoring Co.Ltd. Director, Unitech Electronics International (HK) Limited Director, Shanghai Unitech Electronics (Nantong) Co., Ltd. Director, Fulltech Fiber Glass Corp. Director, Shang-Ling Investment Co., Ltd. Director, Hung-Ling Investment Co., Ltd. Chairman, Yi Hsu Materials Technology Co., Ltd. Supervisor, Da-Tai Investment Co., Ltd. Supervisor, Kuo-Ling Investment Co., Ltd. Supervisor, Shanghai Unitech Electronics Co., Ltd. Supervisor, Semicon Taiwan Co., Ltd.	Chairman	Chang Yuan-Min	Brother

Title	Nationality of place of incorporation	Name	Gender	Date of election to office	Tenure	Initial date of office	Quantity of shareholding at the time of election to office	Quantity of shareholding at the time of election to office	Present holding of shares	Present holding of shares	Holding of shares by spouse, underage children atpresent	Holding of shares by spouse, underage children atpresent	Holding of shares in the name of a third party	Holding of shares in the name of a third party	Major work experience (education)	Adjunct positions with the Company and other companies	Other officers, Directors, or Supervisors who is a spouse or kindred within the 2ndtier.	Other officers, Directors, or Supervisors who is a spouse or kindred within the 2ndtier.	Other officers, Directors, or Supervisors who is a spouse or kindred within the 2ndtier.
							Quantity of shareholding	Proportion of shareholding	Quantity of shareholding	Proportion of shareholding	Quantity of shareholding	Proportion of shareholding	Quantity of shareholding	Proportion of shareholding			Title	Name	Relation
Director	ROC	Ke Wen-Sheng	Male	2018.6.12	3 years	2012.6.19	2,257,648	0.40	2,302,800	0.37	0	0	0	0	PhD, University of London,UK	Director, Kuo Tu Motors. Independent Director, Thunder Tiger	None	None	None
Independent Director	ROC	Chu Min-Hsien	Male	2018.6.12	3 years	2015.6.26	0	0	0	0	0	0	0	0	LLD, National Chengchi University	Director of Hengying Attorneys-at-law	None	None	None
Independent Director	ROC	Wang Feng-Kuei	Male	2018.6.12	3 years	2018.6.12	0	0	0	0	0	0	0	0	PhD, Institute of Teaching System Technology, Indiana University	EMBA full-time professor, Tung Hai University Fellow, Asia Pacific Industrial Analysis Association (APIAA)	None	None	None
Independent Director	ROC	Hsu Wen-Hsin	Female	2018.6.12	3 years	2018.6.12	0	0	0	0	0	0	0	0	Lancaster University PhD, Accounting and Finance	Professor of Accounting, National Taiwan University	None	None	None

(Note 1) At the end of 109, the chairman of the board and the general manager or other persons of equivalent rank were not the same person or had a spouse or relative relationship. Compliance with corporate governance evaluation indicators

Table 1: Dominant shareholders of Institutional Shareholders

		2021.04.30
Name of Institutional Shareholder (Note 1)	Dominant shareholders of Institutional Shareholder(Note 2)	Proportion of shareholding
Kuo-Ling Investment Co., Ltd.	Ocean Rich Enterprises Limited	28.24 %
	Hong-LingInvestment Co., Ltd.	23.53 %
Taichung Harbor Warehousing Stevedoring Co., Ltd.	Kuo-LingInvestment Co., Ltd.	35.00 %
	ChangChin-Lung	6.56 %

Note 1: If specific Director or Supervisor is the representative of an Institutional Shareholder, specify the name of the institution.

Note 2: Provide the names of the dominant shareholder of this Institutional Shareholders (the top 10 shareholders by proportion of shareholding) and respective proportions of shareholding. If the dominant shareholders are Institutional Shareholders, fill in the table below.

Note 3: If the Institutional Shareholder is not a body corporate, the name of the Institutional Shareholder and the proportion of shareholding disclose above shall be the name of benefactor or donor and the proportion of funding or donation.

Table 2: If the dominant shareholders are institutional shareholders, the dominant shareholders behind these shareholders

	2021.04.30	2021.04.30
Name of institution	Dominant shareholders of the Institutional Shareholders	Proportion of shareholding
Ocean Rich Enterprises Limited	Chang Yuan-Fu	100 %
Hong-Ling Investment Co., Ltd.	Brightstar INTL CO., LTD.	38.46 %
	Song-LingInvestment Co., Ltd.	19.07 %

2. The expertise knowledge and state of independence of the Directors:

Condition Name	Meet the following professional qualification requirements, together with at least five years work experience	Meet the following professional qualification requirements, together with at least five years work experience	Meet the following professional qualification requirements, together with at least five years work experience	Conformity to Independence Status (Note 1)	Conformity to Independence Status (Note 1)	Conformity to Independence Status (Note 1)	Conformity to Independence Status (Note 1)	Conformity to Independence Status (Note 1)	Conformity to Independence Status (Note 1)	Conformity to Independence Status (Note 1)	Conformity to Independence Status (Note 1)	Conformity to Independence Status (Note 1)	Conformity to Independence Status (Note 1)	Conformity to Independence Status (Note 1)	Conformity to Independence Status (Note 1)	Number of other public companies concurrently serving as an independent director
	An instructor or higher position in a department of commerce, law, finance, accounting, or other academic department related to the business needs of the company in a public or private junior college, college or university	A judge, public prosecutor, attorney, certified public accountant, or other professional or technical specialists who has passed a national examination and been awarded a certificate in a profession necessary for the business of the company	have work experience in the area of commerce, law, finance, or accounting, or otherwise necessary for the business of the company;	1	2	3	4	5	6	7	8	9	10	11	12
Kuo-Ling Investment Co., Ltd. Representative: Chang Yuan-Min			√			√			√	√	√	√		√		0
Taichung Harbor Warehousing Stevedoring Co.Ltd. Representative: Chang Yuan-Fu			√						√	√	√	√		√		0
Kuo-Ling Investment Co., Ltd. Representative: Chen Cheng-Hsiung			√	√			√		√	√	√	√	√	√		0
Ke Wen-Sheng			√	√	√		√	√	√	√	√	√	√	√	√	1
Chu Min-Hsien	√	√	√	√	√	√	√	√	√	√	√	√	√	√	√	0
WangFeng-Kuei	√		√	√	√	√	√	√	√	√	√	√	√	√	√	0
Hsu Wen-Hsin	√	√	√	√	√	√	√	√	√	√	√	√	√	√	√	0

Note 1: If any Director, Supervisor meets the following condition, in the period of 2 years prior to assumption of office or in the duration of tenure, put a “ “ sign in the following boxes.

(1) Not an employee of the Company or its affiliate.
(2) Not a Director, Supervisor of the Company or its affiliate (except holding the positions of Independent Directors of the Bank who also act as Independent Directors its parent company, subsidiary, or group company under the same parent company under the Securities and Exchange Act or applicable law of the host country).
(3) Not a natural person who holds more than 1% of the outstanding shares issued by the Company by the person, spouse, underage children or in the name of a third party, or among the top 10 shareholders.
(4) Not the spouse, kindred within the 2nd tier or next of kin within the 3rd tier of the mangers as stated in (1), or persons stated in (2) and (3).
(5) Not a Director, Supervisor or employee of the institutional shareholder who directly holds more than 5% of the outstanding shares issued by the Bank, among the top 5 shareholders, or appoints representatives to assume positions as Directors of Supervisors of the Bank under Paragraph 1 or Paragraph 2 of Article 27 of the Company Act (except holding the positions of Independent Directors of the Company who also act as Independent Directors of its parent company, subsidiary, or group company under the same parent company under the Securities and Exchange Act or applicable law of the host country).
(6) Not a Director, Supervisor of employee of a third party company held by the same person who also holds the seats of Directors of the Company or more than half of the voting shares. (except holding the positions of Independent Directors of the Company who also act as Independent Directors of its parent company, subsidiary, or group company under the same parent company under the Securities and Exchange Act or applicable law of the host country).
(7) Not a Director, Supervisor, or employee of a third party company or institution or the spouse of Director, Supervisor, or employee of a third party company or institution who also holds the position of Chairman, General Manger, or similar position. (except holding the positions of Independent Directors of the Bank who also act as Independent Directors of its parent company, subsidiary, or group company under the same parent company under the Securities and Exchange Act or applicable law of the host country).
(8) Not a director (managing director), supervisor, manager, or shareholder holding 5% or more of the shares of a specific company or institution which has a

financial or business relationship with the Company (except for a specific company or institution holding more than 20% and no more than 50% of the total issued shares of the Company and for an independent director engaged concurrently by the Company, its parent company, and its subsidiary or a subsidiary under the same parent company in accordance with the Act or local laws and regulations).

(9) Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides auditing services to the company or any affiliate of the company, or that provides commercial, legal, financial, accounting or related services to the company or any affiliate of the company for which the provider in the past 2 years has received cumulative compensation exceeding NT$500,000, or a spouse thereof. However, this shall not apply to the members of remuneration committee, public tender offer review committee, or special committee for merge and acquisition, who exercise their powers pursuant to the Securities and Exchange Act or the Business Mergers And Acquisitions Act.
(10) Not having a marital relationship, or a relative within the second degree of kinship to any other director of the company;
(11) Not been a person of any conditions defined in Article 30 of the Company Law; and
(12) Not a governmental, juridical person or its representative as defined in Article 27 of the Company Act.

(II) Profiles of the General Manger, Deputy General Managers, Assistant Deputy General Manager, and the heads of the functions and branches Name, major work experience (education), date of election to (assumption of) office, tenure, and the holding of shares by the Director, spouse, underage children or in the name of a third party.

2021.04.25

Title	Nationality	Name	Gender	Date of office	Quantity of shareholding	Quantity of shareholding	Shareholding by spouse, underage children	Shareholding by spouse, underage children	Holding of shares in the name of a thirdparty	Holding of shares in the name of a thirdparty	Major work experience (education)	Other positions with other companies	Spouse or next of kind is a manager	Spouse or next of kind is a manager	Spouse or next of kind is a manager
					Quantity of shareholding	Proportion of shareholding	Quantity of shareholding	Proportion of shareholding	Quantity of shareholding	Proportion of shareholding			Title	Name	Relation
Chief Strategy Officer	ROC	Chang Yuan-Min	Male	2001.1.26	966,332	0.16	--	--	--	--	Master of Electrical Engineering, Washington University, St. Louis, USA.	Chairman and Chief Strategy Officer, Unitech Printed Circuit Board Corp. Director of Unitech Electronics International Limited Chairman, Shanghai Unitech Electronics Co., Ltd. Chairman, Shanghai Unitech Electronics (Nantong) Co., Ltd. Director, Da-Tai Investment Co., Ltd. Director, Kuo-Ling Investment Co., Ltd. Director,Hung-LingInvestment Co.,Ltd.	Executive Vice President	Chang Yuan-Fu	Brother
President	ROC	Hung Hsien-Ching	Male	2017.09.19	270,677	0.04	68,058	0.01	--	--	Department of Industrial Engineering, Tunghai University	Director, Shanghai Unitech Electronics Co., Ltd.	None	None	None
Executive Vice President	ROC	Chang Yuan-Fu	Male	2016.3.24	3,718,781	0.60	60,392	0.01	--	--	Master of Industrial Engineering, University of Southern California MBA, College of Economics Management, National Tsing Hua University MBA, INSEAD	Vice Chairman, Unitech Printed Circuit Board Corp. Director, Taichung Harbor Warehousing Stevedoring Co.Ltd. Director, Unitech Electronics International (HK) Limited Director, Shanghai Unitech Electronics (Nantong) Co., Ltd. Director, Fulltech Fiber Glass Corp. Director, Shang-Ling Investment Co., Ltd. Director, Hung-Ling Investment Co., Ltd. Chairman, Yi Hsu Materials Technology Co., Ltd. Supervisor, Da-Tai Investment Co., Ltd. Supervisor, Kuo-Ling Investment Co., Ltd. Supervisor, Shanghai Unitech Electronics Co., Ltd. Supervisor,Semicon Taiwan Co.,Ltd.	Chief Strategy Officer	Chang Yuan-Min	Brother
Executive Vice President	ROC	Liao Chi-Ming	Male	2016.3.24	44,321	0.01	0	--	--	--	MBA, National Taiwan University	None	None	None	None
Senior Vice President	ROC	Chung Shou-Pu	Male	2009.1.1	141,994	0.02	22,475	--	--	--	MBA, National Taiwan	None	None	None	None

Title	Nationality	Name	Gender	Date of office	Quantity of shareholding	Quantity of shareholding	Shareholding by spouse, underage children	Shareholding by spouse, underage children	Holding of shares in the name of a thirdparty	Holding of shares in the name of a thirdparty	Major work experience (education)	Other positions with other companies	Spouse or next of kind is a manager	Spouse or next of kind is a manager	Spouse or next of kind is a manager
					Quantity of shareholding	Proportion of shareholding	Quantity of shareholding	Proportion of shareholding	Quantity of shareholding	Proportion of shareholding			Title	Name	Relation
											University of Science and Technology
Senior Vice President	ROC	Chen Hsi-Meng	Male	2010.1.1	30,796	--	7,362	--	--	--	Department of Chemical Engineering, University of Chinese Culture	None	None	None	None
Vice President	ROC	Tsai Tung-He	Male	2010.1.1	344,151	0.06	22,924	--	--	--	Electronics Branch, Si Hai Industrial School	None	None	None	None
Vice President	ROC	Chin-Fang Wu	Male	2010.7.1	55,906	0.01	--	--	--	--	Department of Accounting, Feng Chia University	Supervisor, Shanghai Unitech Electronics (Nantong) Co., Ltd.	None	None	None

Vice President Lee Li-Chun has retired on 2020.11.13, and was not included in the table

III. Remunerations to Directors, Supervisors, President, and Vice Presidents in the previous period(2020)

Remuneration to the Directors and Independent Directors (disclose the name and means of remuneration separately):

2020.12.31, Unit: NT$ thousand

												2020.12.31,Unit: NT$thousand	2020.12.31,Unit: NT$thousand	2020.12.31,Unit: NT$thousand	2020.12.31,Unit: NT$thousand	2020.12.31,Unit: NT$thousand	2020.12.31,Unit: NT$thousand	2020.12.31,Unit: NT$thousand	2020.12.31,Unit: NT$thousand
Title	Name	Remuneration to Directors								The sum of A, B, C, and D in proportion to net income		Payment for holding positions as employees								The sum of A, B, C, D, E, F, and G in proportion to net income (Note 10).		Payment from direct investment or parent company other than the subsidiaries.
		Salary (A)		Pension or severance pay (B)		Remuneration to Directors (C (Note 1)		) Professional allowances (D)				Salary, bonus, and special account expense (E)		Pension and severance (F)		Remuneration to employees (G) (Note 1)
		The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company		All companies included in the financial statements		The Company	All companies included in the financial statements
																Amount of cash	Amount of stock	Amount of cash	Amount of stock
Chairman	Kuo-Ling Investment Representative ChangYuan-Min	0	0	0	0	0	0	270	270	-0.02	-0.02	11,320	11,320	0	0	0	0		0	-0.81	-0.81	None
Director	Kuo-Ling Investment Representative Chen Cheng-Hsiung	0	0	0	0	0	0	270	270	-0.02	-0.02	0	0	0	0	0	0	0	0	-0.02	-0.02	None
Director	Taichung Harbor Warehousing and Stevedoring Representative ChangYuan-Fu	0	0	0	0	0	0	270	270	-0.02	-0.02	8,309	8,309	0	0	0	0	0	0	-0.60	-0.60	None
Director	Ke Wen-Sheng	0	0	0	0	0	0	265	265	-0.02	-0.02	0	0	0	0	0	0	0	0	-0.02	-0.02	None
Independent Director	Chu Min-Hsien	0	0	0	0	0	0	1,470	1,470	-0.01	-0.01	0	0	0	0	0	0	0	0	-0.01	-0.01	None
Independent Director	Wang Feng-Kuei	0	0	0	0	0	0	1,470	1,470	-0.01	-0.01	0	0	0	0	0	0	0	0	-0.01	-0.01	None
Independent Director	Hsu Wen-Hsin	0	0	0	0	0	0	1,470	1,470	-0.01	-0.01	0	0	0	0	0	0	0	0	-0.01	-0.01	None
1. Specify the policy, system, standard, and structure of payment to the Directors, the the association between the amount of payment and the duties assumed, the risk, the time requirement and related factors: The Company disburses remuneration to Independent Directors in accordance with the Regulations Governing the Remuneration to Directors and Independent Directors covering the items of : professional duties allowance (travelling expense) and fees for attending meetings. 2.Further to the disclosure in the table above, Directors of the Company who have also receive payment for their service to companies included in the consolidated financial statements (such as consultants): None.

(Note 1): The Company suffered net loss after taxation in 2020. According to the Articles of Incorporation, there was no remuneration appropriated for employees and Directors.

The amount of remuneraiton to the President and Vice Presidents in the previous period (2020) (for disclosure of name in related bracket of the scale of payment):

2020.12.31 Unit: NT$ thousand

Title	Name	Salary(A)	Salary(A)	Pension or severance pay (B) (Note 1)	Pension or severance pay (B) (Note 1)	Bonus and special expense account (C)	Bonus and special expense account (C)	Am	ount of remu	neration to employees (D)	neration to employees (D)	The sum of A, B, C, and D in proportion to net income (%)	The sum of A, B, C, and D in proportion to net income (%)	Payment from direct investment or parent company other than the subsidiaries.
		The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The	Company	All companies included in the financial statements		The Compa~~n~~	All companies included in the financial statements
								Amount of cash	Amount of stock	Amount of cash	Amount of stock
Chief StrategyOfficer	ChangYuan-Min	52,740	52,776	8,820	8,820	0	0	0	0	0	0	-4.29	-4.29	None
President	HungHsien-Ching
Executive Vice President	Chang Yuan-Fu
Executive Vice President	Liao Chi-Ming
Senior Vice President	ChungShou-Pu
Senior Vice President	Chen Hsi-Meng
Vice President	Lee Li-Chun (Retired on 2020.11.13)
Vice President	Tsai Tung-He
Vice President	Chin-FangWu

(Note 1): This is the amount of pension appropriated/paid under law.

Scale of payment for remuneration

Brackets for payment to President and Vice Presidents of the Company individually	Name of President and Vice Presidents	Name of President and Vice Presidents
	The Company	All companies included in the consolidated financial statements
Less than$1,000,000	-	-
1,000,000(inclusive)～$2,000,000(exclusive)	-	-
2,000,000(inclusive)～$3,500,000(exclusive)	Tsai Tung-He,Chin-FangWu	Tsai Tung-He,Chin-FangWu
3,500,000(inclusive)～$5,000,000(exclusive)	ChungShou-Pu,Chen Hsi-Meng	ChungShou-Pu,Chen Hsi-Meng
5,000,000 (inclusive)～$10,000,000(exclusive)	Hung Hsien-Ching, Chang Yuan-Fu, Liao Chi-Ming	Hung Hsien-Ching, Chang Yuan-Fu, Liao Chi-Ming
10,000,000(inclusive)～$15,000,000(exclusive)	Chang Yuan-Min, Lee Li-Chun	Chang Yuan-Min, Lee Li-Chun
$15,000,000(inclusive)～$30,000,000(exclusive)
$30,000,000(inclusive)～$50,000,000(exclusive)	-	-
$50,000,000(inclusive)～$100,000,000(exclusive)	-	-
More than$100,000,000	-	-
Total	9	9

Remuneration to the officers of top 5 payment (disclose the name and means of remuneration separately) 2020.12.31; Unit: NT$ thousand

Title	Name	Salary(A)	Salary(A)	Pension or severance pay (B) （Note 1）	Pension or severance pay (B) （Note 1）	Bonus and special expense account (C)	Bonus and special expense account (C)	amount of remuneration to the employees (D)	amount of remuneration to the employees (D)	amount of remuneration to the employees (D)	amount of remuneration to the employees (D)	The sum of A, B, C, and D in proportion to net income (%)	The sum of A, B, C, and D in proportion to net income (%)	Payment from direct investment or parent company other than the subsidiaries.
		The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company		All companies in the financial report (Note 5)		The Company	All companies included in the financial statements
								Amount of cash	Amount of stock	Amount of cash	Amount of stock
Vice President	Lee Li-Chun (Retired on 2020.11.13)	2,522	2,522	8,820	8,820	0	0	0	0	0	0	-0.79	-0.79	0
Chief Strategy Officer	Chang Yuan-Min	11,320	11,320	0	0	0	0	0	0	0	0	-0.79	-0.79	0
Executive Vice President	Chang Yuan-Fu	8,309,	8,309	0	0	0	0	0	0	0	0	-0.58	-0.58	0
President	Hung Hsien-Ching	8,103	8,103	0	0	0	0	0	0	0	0	-0.56	-0.56	0
Executive Vice President	Liao Chi-Ming	8,067	8,067	0	0	0	0	0	0	0	0	-0.56	-0.56	0

(Note 1): This is the pension payment appropriated/paid under law.

4. Names of managers with payment of remuneration to employees and the payment status

						2020.12.31;Unit: NT$thousand
	Title	Name	Amount of stock	Amount of cash	Total	Sum as percentage of net income after tax (%)
Manager	President	HungHsien-Ching	0	0	0	0
	Executive Vice President	Liao Chi-Ming
	Senior Vice President	ChungShou-Pu
	Senior Vice President	Chen Hsi-Meng
	Vice President	Lee Li-Chun
	Vice President	Tsai Tung-He
	Vice President	Chin-FangWu

Total remuneration to the Directors, Supervisors, President, and Vice Presidents in proportion to the net income presented in the Separate Financial Statement:

Item Title	Sum of remunerations as percentage of net income after tax	Sum of remunerations as percentage of net income after tax	Sum of remunerations as percentage of net income after tax	Sum of remunerations as percentage of net income after tax
	2020		2019
	The Company	All companies included in the financial statements (Note)	The Company	All companies included in the financial statements (Note)
Director	-0.38%	-0.38%	1.60%	1.60%
President and Vice Presidents	-4.29%	-4.29%	7.27%	7.27%

(Note) Calculation of total remuneration in proportion to net income, and the net income excludes the net worth of minority equity.

The total remuneration of directors for 2019 and 2020 does not include the remuneration received by part-time employees.

6.the policy, standard, and components of payment, the procedure of decision, and the association with operation performance and risk in the future:
(1) The policy, standard, components for remuneration and the procedure for the determination of the amount of payment of the Company is mainly based on related personnel management regulations. The appropriation of earnings as remuneration to the employees and the Directors is based on the Articles of Incorporation subject to the approval of the Compensation Committee and referral to the Board for final approval, and reported to the Shareholders Meeting.
The Compensation Committee of the Company evaluates the policy and system of salaries and remunerations to the Directors and the managers in objectivity and professional standing, and gives recommendation to the Board as reference for decision-making.
(2) The payment for remuneration is positively associated with operation performance and with reference to the result of the assessment of risks in the future insetting a reasonable level.

IV. Status of Corporate Governance:

(I) The function of the Board:

The Board convened for 6 times (A) in the previous period. The attendance of the Directors and

Supervisors is specified below:

Title	Name	Actual attendance frequency (as observers) (B)	Attendance by proxy	Actual attendance (as observers) rate (%) [B/A]	Remark
Chairman	Kuo-Ling Investment Co., Ltd. Representative: Chang Yuan-Min	6	0	100%
Vice Chairman	Taichung Harbor Warehousing and Stevedoring Co., Ltd. Representative: Chang Yuan-Fu.	6	0	100%
Director	Kuo-Ling Investment Co., Ltd. Representative: Chen Cheng-Hsiung	6	0	100%
Director	Ke Wen-Sheng	5	1	83%	Trustee: Chang Yuan-Fu
Independent Director	Chu Min-Hsien	6	0	100%
Independent Director	Wang Feng-Kuei	6	0	100%
Independent Director	Hsu Wen-Hsin	6	0	100%

The Board of the Company convened twice [A] in 2021 (to 2021.04.30, on which this report was

printed). The attendance of the Directors is shown below:

Title	Name	Actual attendance frequency (as observers) (B)	Actual attendance (as observers) rate (%) [B/A]
Chairman	Kuo-Ling Investment Co., Ltd. Representative: Chang Yuan-Min	2	100%
Vice Chairman	Taichung Harbor Warehousing and Stevedoring Co., Ltd. Representative: Chang Yuan-Fu.	2	100%
Director	Kuo-Ling Investment Co., Ltd. Representative: Chen Cheng-Hsiung	2	100%
Director	Ke Wen-Sheng	2	100%
Independent Director	Chu Min-Hsien	2	100%
Independent Director	Wang Feng-Kuei	2	100%
Independent Director	Hsu Wen-Hsin	2	100%

Additional information:

If any of the following applies to the Board in operation, specify the date, the session, content of the motions, opinions of the Independent Directors, and the response of the Company to these opinions:
(1) Particulars under Article 14-3 of the Securities and Exchange Act: The Company has established the Audit Committee that the rule under Article 14-3 of the Securities and Exchange Act is not applicable here. For additional information, refer to pp. 23~24 of the Annual Report in the section of the function of the Audit Committee.
(2) Further to the above, other resolutions of the Board with adverse or qualified opinions from the Independent Directors with record or in written declaration: None
Recusal of the Directors from motions with a conflict of interest. Specify the name of the Directors, the content of the motions, the reasons for recusal from the conflict of interest and participation in voting:
(1) The Board in the session dated 2020.01.13 (Motion no. 2 for discussion):
- The Board proposed to donate “Unitech Education Foundation”. Chairman Chang Yuan-Min and Vice Chairman Chang Yuan-Fu are next of kin to the Chairman of “Unitech Education Foundation” and Independent Director Chu Min-Hsien is a Director of “Unitech Education Foundation”, who should recuse from the discussion and voting on this motion. Chairman Chang Yuan-Min appointed Director Chen Cheng-Hsiung to act as the proxy to preside over the meeting. The other Directors in session voted in common consent on the motion as stated.
(2) The Board in the session dated 2020.03.23 (Motion no. 12 for discussion): The Board proposed to donate “The Business Development Foundation of the Chinese Straits”. Chairman Chang Yuan-Min is the Vice Chairman of “The Business Development Foundation of the Chinese Straits”, Director Chen Cheng-Hsiung and Independent Director Chu Min-Hsien are the Directors of the foundation, and Vice Chairman Chang Yuan-Fu and Chairman Chang Yuan-Min are next of kind to each other, and all should recuse from the discussion and voting on the motion. Chairman Chang Yuan-Min appointed Director Ke Wen-Sheng as proxy to preside over the meeting. The other Directors in session voted in common consent on the motion as stated.
(3) The Board in the session dated 2020.08.05 (Motion no. 5 for discussion):

The Chairman of the Company also hold the position of “Chief Strategy Officer”. Since Chairman Chang Yuan-Min is the party concerned while Vice Chairman Chang Yuan-Fu is the next of kin to the Chairman, and should recuse from the discussion and voting on this

motion. Chairman Chang Yuan-Min appointed Director Chen Cheng-Hsiung to act as the proxy to preside over the meeting. The other Directors in session voted in common consent on the motion as stated.

(4) The Board in the session dated 2020.11.06 (Motion no. 3 for discussion):
The Board proposed to donate the “Taiwan Coalition of Service Industries”. Chairman Chaung Yuan-Ming is the Chairman of the coalition, Director Chang Yuan-Fu is the next of kin to Chairman Chang Yuan-Min, Director Chen Cheng-Hsiung is the representation of Kuo-Ling Investment, who all should recuse from the discussion and voting on the motion. Chairman Chang Yuan-Min appointed Director Ke Wen-Sheng as proxy to preside over the meeting. The other Directors in session voted in common consent on the motion as stated.
(5) The Board in the session dated 2021.01.19(Motion no. 1 for discussion):

The Board proposed to donate “Unitech Education Foundation”. Chairman Chang Yuan-Min and Vice Chairman Chang Yuan-Fu are next of kin to the Chairman of “Unitech Education Foundation” and Independent Director Chu Min-Hsien is a Director of “Unitech Education Foundation”, who should recuse from the discussion and voting on this motion. Chairman Chang Yuan-Min appointed Director Chen Cheng-Hsiung to act as the proxy to preside over the meeting. The other Directors in session voted in common consent on the motion as stated.

The Company listed at TWSE/TPEx should disclose the frequency and duration of self-evaluation (or peer evaluation) of the Board, the scope of evaluation, method and content of evaluation, and fill in the form below on the pursuit of Board evaluation.

The pursuit of Board evaluation:

Frequency of evaluation	Evaluation period	Scope of evaluation	Method of evaluation	Content of evaluation
Conduct once annually	Evaluation of the performance from 2020.01.01 to 2020.12.31	The Board`、` Individual Directors	Self-Evaluation of the Board`、` Self-Evaluation of the Directors	(1) Evaluation of the performance of the Board (Note 1) (2) Evaluation of the performance of individual Directors (Note 2)

(Note 1) Evaluation of the performance of the Board: including the degree of participation in the operation of the Company, the quality of decision-making of the Board, the organization and structure of the Board, the election and continuing education of Directors, and internal control. (Note 2) Evaluation of the performance of individual Directors: including the mastery of the corporate objective and mission, understanding of the responsibility of Directors, degree of participation in the operation of the Company, cultivation of internal relation and communication, professional standing and continuing education of the Directors, and internal control.

The objective for fortifying the function of the Board in the previous and current period (such as the establishment of Audit Committee and enhancement of information transparency), and the implementation:
(1) The Board resolved to institute the “Standard Operation Procedure for Responding to the Requests of Directors” on 2019.03.05 and to set up the position of “Corporate Governance Officer” on 2020.04.28 in order to strengthen the performance of the Board.
- Head of Finance and Accounting, Vice President Chin-Fang Wu, assumed office as the “Corporate Governance Officer”. She has more than 3 years of experience as an executive in the areas of finance, shares registration and transfer, or corporate governance related affairs.
(2) The Board resolved to appoint the Chairman to hold the position of “Chief Strategy Officer” simultaneously for strengthening the performance of the organization and in supporting the corporate governance evaluation system of Taiwan Stock Exchange Corporation.
(3) Three seats of the Board have been reserved for Independent Directors as required by law. All the Independent Directors act as the members of the “Audit Committee” and “Compensation Committee”. To assist the Board to enhance the performance of corporate governance and transparency of the remuneration of the Company.
(4) The Company has appointed designated personnel to disclose important information. Directors of the Company
- have received continuing education every year. In 2020, they have received 57 hours of training (see table below)

for strengthening the function of the Board.

Title	Name	Date of training	Sponsoring Unit	Session Name	Hours of training
Chairman	Kuo-Ling Investment Representative: Chang Yuan-Min	2020/09/03	Taiwan Listed Company Association	Challenges and Opportunities of Taiwan under the New International Situation	2
		2020/08/13	Taiwan Printed Circuit Association	Benchmark Forum - Changed and Unchanged, Post Epidemic	1.5
		2020/07/01	The Business Development Foundation of the Chinese Straits	Corporate Governance and Intellectual Property Rights, Trade Secrets and Non-competition	6
		2020/06/16	Taiwan Listed Company Association	Corporate Governance of Taiwan After Epidemic	2
Director	Taichung Harbor Warehousing Stevedoring Co.Ltd. Representative: Chang Yuan-Fu	2020/10/23	Stock Exchange	2020 Corporate Governance and Supervision of Ethical Corporate Management Conference	3
		2020/09/03	Taiwan Listed Company Association	Challenges and Opportunities of Taiwan under the New International Situation	2
		2020/07/22	Taiwan Academy of Banking and Finance	Corporate governance and CSR session	3
		2020/07/01	The Business Development Foundation of the Chinese Straits	Corporate Governance and Intellectual Property Rights, Trade Secrets and Non-competition	6
Director	Kuo-Ling Investment Representative: Chen Cheng-Hsiung	2020/08/13	Taiwan Printed Circuit Association	Benchmark Forum - Changed and Unchanged, Post Epidemic	1.5
		2020/07/01	The Business Development Foundation of the Chinese Straits	Corporate Governance and Intellectual Property Rights, Trade Secrets and Non-competition	6
Director	Ke Wen-Sheng	2020/07/01	The Business Development Foundation of the Chinese Straits	Corporate Governance and Intellectual Property Rights, Trade Secrets and Non-competition	6
Independent Director	Chu Min-Hsien	2020/07/01	The Business Development Foundation of the Chinese Straits	Corporate Governance and Intellectual Property Rights, Trade Secrets and Non-competition	6
Independent Director	Wang Feng-Kuei	2020/07/01	The Business Development Foundation of the Chinese Straits	Corporate Governance and Intellectual Property Rights, Trade Secrets and Non-competition	6

The Business Development Independent Hsu Wen-Hsin 2020/07/01 Foundation of the Chinese Corporate Governance and Intellectual Property Rights, 6 Director Straits Trade Secrets and Non-competition

(II) The gravity of work of the Audit Committee and the pursuit:

Function of the Audit Committee:
(1) Institution of or amendment to the internal control system pursuant to Article 14-1 of the Securities and Exchange Act.
(2) Evaluation of the effectiveness of the internal control system.
(3) Institution of or amendment to the Procedure for the Acquisition or Disposal of Assets, Engagement in Derivative Trade, Loaning of Fund, Endorsement and Guarantee in favor of a third party, and related procedure of significant financial effect pursuant to Article 36-1 of the Securities and Exchange Act.
(4) Items involved with the private interest of the Directors.
(5) Important asset trade or derivative trade.
(6) Important loaning of funds, endorsement or guarantee.
(7) Issuance, offering or private placement of equity securities.
(8) The appointment, dismissal and remuneration to Independent Auditors
(9) The appointment and dismissal of the head of finance, accounting, or internal audit.
(10) Financial statements affixed with the signatures or seals of the Chairman, President, and Chief Accounting Officer.
(11) Any other forms of materiality defined by the Company or the competent authority.
Gravity of work in the year: The gravity of work of the Audit Committee in this year includes review of the financial statements, evaluation of the effectiveness of the internal control system, matters pertinent to corporate governance, and revision of the internal control system.
The Audit Committee in action: The Audit Committee of the Company is consisted of 3 members.

The Audit Committee of the Company convened for 6 times in 2020 [A]. The Attendance (attend as observers) of the

Directors is shown below:

Title	Name	Actual attendance (attend as observers) [B]	Actual attendance (attend as observers) rate (%) [B/A]
Independent Director	Hsu Wen-Hsin	6	100%
Independent Director	Chu Min-Hsien	6	100%
Independent Director	Wang Feng-Kuei	6	100%

The Audit Committee of the Company convened twice in 2021 [A] (to 2021.04.30, the day on which this report was

printed.). The attendance of the Directors (attend as observers” is shown below:

Title	Name	Actual attendance (attend as observers) [B]	Actual attendance (attend as observers) rate (%) [B/A]
Independent Director	Hsu Wen-Hsin	2	100%
Independent Director	Chu Min-Hsien	2	100%
Independent Director	Wang Feng-Kuei	2	100%

Additional information:

If any of the following applies to the operation of the Audit Committee, specify the date and session of the Board, the

content of the motion, the resolution of the Audit Committee, and response of the Company to the opinions of the

Audit Committee:

(1) Particulars inscribed in Article 14-5 of the Securities and Exchange Act.

The date and session of the Board	Content of the motions	The resolution of the Audit Committee and response of the Company to the opinions of the Audit Committee
The 13th Board The 12th session on 2020.01.13	Donation to “Unitech Education Foundation”.	1. All Independent Directors acted in favor of the motion. 2. The response of the Company to the opinions of the Independent Directors: all Directors acted in common consent for approval. .
The 13th Board The 13th session on 2020.03.23	1. The 2019 Business Report and Financial Statements of the Company (including consolidated financial statements).	1. All Independent Directors acted in favor of the motion. 2. The response of the Company to the opinions of the Independent Directors: all Directors acted in common consent for approval.
	2. Evaluation of the independence of the Independent Auditors and the appointment.
	3. The statement of declaration of internal control of the Company.
	4. Revision of the internal control system of the Company.
	5. Donation to “The Business Development Foundation of the Chinese Straits”.
The 13th Board The 14th session on 2020.04.28	Revision of the internal control system and internal audit system of the Company.	1. All Independent Directors acted in favor of the motion. 2. The response of the Company to the opinions of the Independent Directors: all Directors acted in common consent for approval.
The 13th Board The 16th session on 2020.08.05	1. Revision of the internal control system of the Company.	1. All Independent Directors acted in favor of the motion. 2. The response of the Company to the opinions of the Independent Directors: all Directors acted in common consent for approval.
	2. Investment for the establishment of Shanghai Unitech Electronics (Nantong) Corporation. Investment for the establishment of Shanghai Unitech Electronics (Nantong) Co., Ltd., the means of investment, sources of capital, and revision of the equipment moving report on Shanghai Unitech Electronics Co.,Ltd.
The 13th Board The 17th session on 2020.11.06	1. Revision of the internal control system and internal audit system of the Company.	1. All Independent Directors acted in favor of the motion. 2. The response of the Company to the opinions of the Independent Directors: all Directors acted in
	2. Donation to “Taiwan Coalition of Service Industries”.

		common consent for approval.
The 13th Board The 18th session on 2021.01.19	1. Donation to “Unitech Education Foundation”.	1. All Independent Directors acted in favor of the motion. 2. The response of the Company to the opinions of the Independent Directors: all Directors acted in common consent for approval.
	2. Amendment to the implementation rules for internal audit of the Company.
The 13th Board The 19th session on 2021.03.30	1. 2020 Business Report and Financial Statements of the Company (including consolidated financial statements).	1. All Independent Directors acted in favor of the motion. 2. The response of the Company to the opinions of the Independent Directors: all Directors acted in common consent for approval.
	2. The Company switched to the appointment of other CPAs as Independent Auditors in conjunction with the routine job rotation of the CPA firm.
	3. Evaluation of the independence of the Independent Auditors and the appointment.
	4. The statement of declaration of internal control of the Company.

(2) Further to the above, any other motions not passed by the Audit Committee but resolved by more than 2/3 of the Directors for approval: none.
In the recusal of Independent Directors on motions with conflict of interest, specify the name of the Independent Directors, the content of the motions, and the reason for recusal, and the voting:
(1) Audit Committee meeting on 2020.01.13 (Motion no. 1 for discussion):

In the motion of donation to “Unitech Education Foundation”, Member Chu Min-Hsien is a Director of the Foundation and should recuse from discussion and voting on the motion, the other members in session voted in common consent in favor of the motion as stated.

(2) Audit Committee meeting on 2020.03.23 (Motion no. 6 for discussion):

n the motion of donation to “The Business Development Foundation of the Chinese Straits”, Member Chu Min-Hsien is a Director of the Foundation and should recuse from discussion and voting on the motion, the other members in session voted in common consent in favor of the motion as stated.

(3) Audit Committee meeting on 2021.01.19(Motion no. 1 for discussion):

The communication between Independent Directors and the Chief Internal Auditor and the Independent Auditors (should include the material aspects in finance and business, the means of communication and the result):
Communication between the Independent Directors and Chief Internal Auditor:
- (1) Present the annual audit plan of the next year at the end of the fiscal period to the Board for approval.
- (2) Internal audit will be conducted in accordance with the internal audit plan, and present the audit report to the Independent Directors for review by the end of the next month followed the last day of audit. The Independent Directors may have query or instruction, and will consult or inform the Chief Internal Auditor.

(3) Report to the Board on the pursuit of the annual audit plan once quarterly.
(4) The evaluation of the effectiveness of the internal control system, and presentation of the statement of

declaration of internal control to the Audit Committee for review.

 Summary of the communications between the Independent Directors and the Chief Internal Auditors:

 Summary	of the communications between the Independent Directors and	the Chief Internal Auditors:
Date	Gravity of communication	Recommendation of the Independent Directors and result
2020/03/23	The pursuit of internal audit and the 2019 statement of declaration of internal control.	None
2020/05/12	Report on the pursuit of internal audit.	None
2020/08/05	Report on the pursuit of internal audit.	None
2020/11/06	Report on the pursuit of internal audit, 2021 Annual Audit Plan	None
2021/03/30	Report on the pursuit of internal audit, 2020 statement of declaration of internal control.	None

The communication between the Independent Directors and the Independent Auditors:
(1) The Independent Directors meet with the CPAs acting as Independent Auditors at least once a year. The

Independent Auditors will give the summary of related issues from their audit on the financial statements of the

year in the briefing before the convention of the Board on topics of amendment to applicable laws for discussion and communication.

(2) The Independent Auditors review the audited financial statements quarterly, and issue a review report in the name of the Audit Committee every year.

 The summary of communication between the Independent Directors and the Independent Auditors:

Date	Gravity of communication	Recommendation of the Independent Directors and result
2020/03/23	1. The Independent Auditors reports on the summary of the issues related to the audit of the 2019 Financial Statements in the briefing. 2. The Independent Auditors reports on the update version of applicable laws for discussion and communication.	None

2020/11/06	1. The Independent Auditors reports on the summary of the issues related to the audit of the financial statements covering Q3 2020 in the briefing. 2. The Independent Auditors reports on the update version of applicable laws for discussion and communication.	None
2021/03/30	1. The Independent Auditors reports on the summary of the issues related to the audit of the 2020 Financial Statements in the briefing. 2. The Independent Auditors reports on the update version of applicable laws for discussion and communication.	None

(III) The pursuit of corporate governance and the variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies, and the reason

Items for evaluation	Operation Status	Operation Status	Operation Status	Variance from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies, and the reason for any such variance
	Yes	No	Summary
I. Has the Company instituted its own corporate governance best practice principles in accordance with the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and made disclosure?	√		The Company has instituted the “Corporate Governance Best Practice Principles” with reference to the “Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies” This set of principles has been passed by the Board and disclosed at the official website of the Companyand MOPS	No significant variation
II. Shareholding Structure & Shareholders’ Rights (I) Has the Company established its internal operation procedure for responding to the suggestions, queries, disputes, and legal actions of the shareholders in accordance with the procedure? (II) Has the Company kept the list of the dominant shareholders that exercise de facto control of the Company and the parties that exercise ultimate control of these dominant shareholders under control? (III) Has the Company established and exercised risk control and firewall mechanisms with its affiliates? (IV) Has the Company instituted internal rules and regulations prohibiting insiders from using undisclosed information in the market for the trading of securities?	√ √ √ √		(I) The Company has a spokesperson and an acting spokesman, the Legal Affairs Office, and designated personnel responsible for share registration and transfer and related investor service. They will respond to the suggestion or queries of the shareholders. (II) The Company keep abreast of the list of dominant shareholders the ultimate controlling parties of the dominant shareholders. (III) The Company has instituted related procedures and regulations governing the transactions, endorsement and guarantee, and loaning of funds with other enterprises. In addition, the Company has also instituted the “Regulations Governing the Management and Control of Subsidiaries” for the proper performance of risk control over the subsidiaries. (IV) The Company has instituted the “Regulations Governing the Collection and Management of Information in Materiality” for the fair trade in the securities market and establishment of the mechanisms for the processing and disclosure of information in materiality, and for assurance of the timely and accurate disclosure of information.	In conformity to the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies. In conformity to the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies. In conformity to the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies. In conformity to the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies.
III. Composition and Responsibilities of the Board of Directors (I) Has the Board developed its policies in diversity relevant to the composition of the members and has it properly pursued these policies?	√		(I) The “Corporate Governance Best Practice Principles” instituted by the Board of the Company contains the policy of diversity. The nomination and election of members of the Board is governed by the Articles of Incorporation wherebythe candidate nomination system is adopted. The	In conformity to the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies.

Items for evaluation	Operation Status	Operation Status	Operation Status	Variance from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies, and the reason for any such variance
	Yes	No	Summary
(II) Has the Company voluntarily established other functional committees further to the establishment of a compensation committee and audit committee? (III) Has the Company established the rules and regulations and the methods for the evaluation of Board performance, and has it conducted performance evaluation at regular intervals of each year?	√	√	Company observes the “Corporate Governance Best Practice Principles” for assurance of the diversity and independence of the members of the Board. The Board contains 3 Independent Directors (one is a female: Director Hsu Wen-Hsing). Directors Chang Yuan-Min, Chang Yuan-Fu, Chen Cheng-Hsiung and Ke Wen-Shange are good leaders, make sound judgment in operation, and well-seasoned in corporate and crisis management. They are also disciplined with related industry knowledge and hold international view of market. Independent Directors Chu Min-Hsien, Wang Feng-Kuei, and Hsu Wen-Hsing are specialized in legal affairs, disciplined with related industry knowledge, hold international view of market, and the ability in accounting and financial analysis. The company’s employee-identified directors accounted for 2/7, external individual directors accounted for 4/7, independent directors accounted for 3/7, and female directors accounted for 1/7. The term of office of independent directors: 2/3 for those with less than two terms, and 1/3 for those who have served two terms. (II) The Company has established the Compensation Committee in 2012 as required by law, and the Audit committee after the convention of the General Meeting of Shareholders in 2018. (III) The Company has instituted the regulations governing the evaluation of performance of the Board in a Board session dated 2020.03.23, and has conducted an evaluation at the end of 2020. The evaluation result was reported to the Board in the session dated 2021.03.30, and will be used as reference for deciding the remuneration to individual Directors and the nomination for a renewed term of office.	The Company will establish different functional committees as required for actual operation. In conformity to the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies. In conformity to the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies.

Items for evaluation	Operation Status	Operation Status	Operation Status	Variance from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies, and the reason for any such variance
	Yes	No	Summary
(IV) Has the Company assessed the independence status of the CPAs at regular intervals?	√		(IV) The Company assessed the independence of the CPAs retained as Independent Auditors every year, and required them to issue the “Declaration of Impartiality and Independence”. The Audit Committee and the Board assessed the Independent Auditors and their relatives on 2021.03.30, and confirmed that there is no other financial and business interest between these people and the Company except the fees for audit service and taxation consultation.	In conformity to the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies.
IV. Has the company listed at the TWSE/TPEx designated a number of qualified personnel and appointed an officer for administering corporate governance (including but not limited to the supply of information for the Directors and Supervisors in performing their duties, holding of meetings for the Board and the Shareholders Meeting and handling related matters, administering company registration and relevant changes, and compilation of the minutes of meetings of the Board and Shareholders Meeting on record)?	√		The Company resolved in a Board session dated 2020.04.28 to establish the position of Corporate Governance Officer (Vice President Chin-Fang Wu, head of finance and accounting, was appointed to this position) with the appropriate staffing with a number of competent personnel acting as corporate governance staff charged with the duties of corporate governance related works. The function and scope of authority has been explicitly	In conformity to the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies.
			stated in the “Corporate Governance Best Practice Principles of the
			Company” and covers at least the following content:
			I. Administering the conventions of the Board and the
			Shareholders Meeting and related matters.
			II. Preparation of the minutes of meetings of the Board and
			Shareholders Meetings on record. III. Assistance to the Directors in continuing education.
			IV. Supply the materials to the Directors necessary for the
			performance of their assigned duties. V. Assistance to the Director in law compliance.
			VI. Any other matters under the Articles of Incorporation of the
			Companyor the contracts.

Items for evaluation	Operation Status	Operation Status	Operation Status	Variance from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies, and the reason for any such variance
	Yes	No	Summary
V. Has the Company established channels for the communications with the stakeholders (including but not limited to the shareholders, employees, customers, and suppliers), and the section for the shareholders on the official website of the Company to respond to all concerns of the stakeholders on corporate social responsibility?	√		The Company has established the spokesman system and appropriately used its official website in setting up a special section of corporate social responsibility and stakeholder relation as the channel for communication.	In conformity to the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies.
VI. Has the Company appointed a professional registrar for its Shareholders Meetings?		√	The Company has established the “Share Registrar Office” to administer Shareholders Meeting and share registration and transfer related matters.	Action will be taken in line with the actual need in operation of the Company.
VII. Information Disclosure (I) The Company has installed a website for the disclosure of information on finance, business, and corporate governance. (II) Has the Company adopted any other mean for information disclosure (such as the installation of a website in English language, appointment of designated persons for the collection and disclosure of information on the Company, the proper pursuit of the spokesman system, and the record on institutional investors conference was placed at the official website)? (III) Has the Company disclosed and declared the financial statements within 2 months after the end of the fiscal year, and announced and declared the financial statements covering Q1, Q2, and Q3, and the monthly business reports before the deadline?	√ √	√	(I) The Company has disclosed information on financial position and operation, and corporate governance in the section of Investor Relation of its official website. With routine update for the reference of the investors. (II) The Company has a Chinese version and English version of its website, and has appointed designated personnel to collect and disclose information in materiality. Information on institutional investors conference will also be posted at the official website. The Company has established the system of spokesperson and acting spokesman as required. (III) The Company has announced and declared the annual financial report and financial statements covering Q1, Q2, and Q3 by designated deadlines.	In conformity to the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies. In conformity to the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies. Action will be taken in line with the actual need in operation of the Company.
VIII. Is there any other essential information that would help us to understand the pursuit of corporate governance (including but not limited to employee rights, employee care, investor relations, supplier relations, stakeholder rights,the continuingeducation of the Directors and	√		(I) Employee Right: The Company treats the employees in good will at all time and protect their rights under the Labor Standard Act. (II) Employee Care: The Company has established the Employee Welfare Committee andprovides benefits to the	In conformity to the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies.

Items for evaluation	Operation Status	Operation Status	Operation Status	Variance from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies, and the reason for any such variance
	Yes	No	Summary
Supervisors, the pursuit of a risk management policy and standard of risk assessment, the pursuit of a customer policy, and professional liability insurance coverage for the Directors and Supervisors)?			employees and appropriates funds for the pension reserve of the employees under law. (III) Investor relation: The Company has established a Share Registrar Office and spokesman system for responding to the suggestion of the shareholders. (IV) Supplier relation: The Company is on good terms with the suppliers at all time. (V) Stakeholder rights: The Company has instituted the “Regulations Governing Related-Party Transactions” for assurance of recusal from the conflict of interests of the related-parties. (VI) Continuing education of the Directors and Supervisors: Further to the professional background and industry knowledge, as well as the practical experience in corporate management of the Directors and Supervisors, the Company also comply with the requirement of Taiwan Stock Exchange Corporation to provide external training with routine disclosure of related information. (VII) Risk management policy and the pursuit of the risk measurement standard: The Company passed the new “Policies and Procedures for Risk Management” in the Board session dated 220.11.06, and has established the Risk Management Committee which shall report to the Board once on its operation once annually. (VIII) The pursuit of customer policy: The Company is on good terms with the customers at all time. (IX) Liability insurance for the protection of the Directors and Supervisors of the Company: The Company has taken liability insurance for the protection of the Directors and Supervisors pursuant to Article 25-1 of the Articles of Incorporation, and reported to the Board of the amount insured (US$10 million), scope of coverage, and premium rate in the session dated 2020.08.05. The insured period expires in July 2021.

Items for evaluation	Operation Status	Operation Status	Operation Status	Variance from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies, and the reason for any such variance
	Yes	No	Summary
IX. The state of corrective action taken in response to the corporate governance evaluation result announced by the Corporate Governance Center of Taiwan Stock Exchange Corporation, and the issues requiring special effort for improvement and related measures: The Company was rated at 51%~65% in the evaluation of the last 1 years, and has also taken corrective action with disclosure of the gravity of work of the Audit Committee in the year, and the English version with Financial Report in English at the website. Incremental stephas been taken to rectifythe areas for improvement.

(IV) If the Company has established Compensation Committee, disclose the organization, function, and operation:

1. Profiles of the members of the Compensation Committee

Identity `（`Note 1`）`	Condition Name	Meet the following professional qualification requirements, together with at least five years work experience	Meet the following professional qualification requirements, together with at least five years work experience	Meet the following professional qualification requirements, together with at least five years work experience	Conformity to independence (Note 2)	Conformity to independence (Note 2)	Conformity to independence (Note 2)	Conformity to independence (Note 2)	Conformity to independence (Note 2)	Conformity to independence (Note 2)	Conformity to independence (Note 2)	Conformity to independence (Note 2)	Conformity to independence (Note 2)	Conformity to independence (Note 2)	Number of companies as members in the Remuneration Committee
		An instructor or higher position in a department of commerce, law, finance, accounting, or other academic department related to the business needs of the company in a public or private junior college, college or university	Court judge, public prosecutor, lawyer, certified public accountant, or personnel with specialized skills and training to the needs of the operation of the Company and passed by related national examinations with proper licensing and certification.	Have work experience in the area of commerce, law, finance, or accounting, or otherwise necessary for the business of the company;	1	2	3	4	5	6	7	8	9	10
Independent Director	Chu Min-Hsien	√	√	√	√	√	√	√	√	√	√	√	√	√	0
Independent Director	Wang Feng-Kuei	√		√	√	√	√	√	√	√	√	√	√	√	0
Independent Director	Hsu Wen-Hsin	√	√	√	√	√	√	√	√	√	√	√	√	√	0

Note 1: Please state whether the person is a Director, an Independent Director, or others in the “Status” column.

Note 2: If the members meet the following conditions in the period of 2 years before the assumption of office or within the term of office, put a “tick” in the appropriate boxes.
（1） Not an employee of the Company or its affiliate.
（2） Not a Director, Supervisor of the Company or its affiliate (except holding the positions of Independent Directors of the Bank who also act as Independent Directors its parent company, subsidiary, or group company under the same parent company under the Securities and Exchange Act or applicable law of the host country).
（3） Not a natural person who holds more than 1% of the outstanding shares issued by the Company by the person, spouse, underage children or in the name of a third party, or among the top 10 shareholders.
（4） Not the spouse, kindred within the 2nd tier or next of kin within the 3rd tier of the mangers as stated in (1), or persons stated in (2) and (3).
（5） Not a Director, Supervisor or employee of the institutional shareholder who directly holds more than 5% of the outstanding shares issued by the Bank, among the top 5 shareholders, or appoints representatives to assume positions as Directors of Supervisors of the Bank under Paragraph 1 or Paragraph 2 of Article 27 of the Company Act (except holding the positions of Independent Directors of the Company who also act as Independent Directors of its parent company, subsidiary, or group company under the same parent company under the Securities and Exchange Act or applicable law of the host country).
（6） Not a Director, Supervisor of employee of a third party company held by the same person who also holds the seats of Directors of the Company or more than half of the voting shares. (except holding the positions of Independent Directors of the Company who also act as Independent Directors of its parent company, subsidiary, or group company under the same parent company under the Securities and Exchange Act or applicable law of the host country).
（7） Not a Director, Supervisor, or employee of a third party company or institution or the spouse of Director, Supervisor, or employee of a third party company or institution who also holds the position of Chairman, General Manger, or similar position. (except holding the positions of Independent Directors of the Bank who also act as Independent Directors of its parent company, subsidiary, or group company under the same parent company under the Securities and Exchange Act or applicable law of the host country).
（8） Not a director (managing director), supervisor, manager, or shareholder holding 5% or more of the shares of a specific company or institution which has a financial or business relationship with the Company (except for a specific company or institution holding more than 20% and no more than 50% of the total issued shares of the Company and for an independent director engaged concurrently by the Company, its parent company, and its subsidiary or a subsidiary under the same parent company in accordance with the Act or local laws and regulations).
（9） Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership,

company, or institution that, provides auditing services to the company or any affiliate of the company, or that provides commercial, legal, financial, accounting or related services to the company or any affiliate of the company for which the provider in the past 2 years has received cumulative compensation exceeding NT$500,000, or a spouse thereof. However, this shall not apply to the members of remuneration committee, public tender offer review committee, or special committee for merge and acquisition, who exercise their powers pursuant to the Securities and Exchange Act or the Business Mergers And Acquisitions Act.

（10） Not been a person of any conditions defined in Article 30 of the Company Act

2.Function of the Remuneration Committee

The Compensation Committee evaluates the policy and system of salaries and remunerations to the Directors and the managers in professional standing and objectivity, and gives recommendation to the Board as reference for decision-making. The organization charter of the Compensation Committee has been disclosed at MOPS.

3. Information on the operation of the Remuneration Committee

I. The Compensation Committee of the Company is consisted of 3 members.

II. Tenure of the members for current term: 2018.07.12 to 2021.06.11.

The Compensation Committee convened twice in the previous period (2020), and the attendance of the members is shown below:

Title	Name	Actual attendance (Ｂ)	Attendance by proxy	Actual attendance rate (%) (Ｂ/Ａ) (Note)	Actual attendance rate (%) (Ｂ/Ａ) (Note)
Convener	Chu Min-Hsien	2	0	100%
Members	Wang Feng-Kuei	2	0	100%
Members	Hsu Wen-Hsin	2	0	100%
Additional information: 1、 If the Board declines to accept or revise the recommendations of the Remuneration Committee, specify the meeting date, the session, the content of the motion, the resolutions of the Board, and the response of the Company to the opinions of the Remuneration Committee (if the Board resolved a higher level of remuneration than the recommendation of the Remuneration Committee, specify the difference and the reason for the difference): None 2、 If a specific member of the Remuneration Committee has adverse or qualified opinions on the resolutions of the Remuneration Committee on record or in written declaration, specify the meeting date, the session, the content of the motion, the opinions of all members, and the response to the opinions of the members: nothing like this happened. 3、 Summaryof the Compensation Committee: Date and session of the Committee Meeting Content of the Report The result of the report from Compensation Committee and the Response of the Company to the opinions of the members The 4th Compensati on Committee The 5th session on 2020.1.13 1. Recommendation on the remuneration to the employees and Directors in 2019. 1、 All members acted in common consent on the motion. 2、 The response of the Company to the opinions of the Compensation Committee: all the Directors passed the motion in common consent. 2. Amendment to the “Regulations Governing the Salaries and Bonus to the Managers”. 3. The plan for the release of year-end bonus and special bonus to the mangers in 2019. The 4th Compensati on Committee The 6th session on 2020.8.05 1. The release of pension to Vice President Kuang Sen-Po. 1、 All members acted in common consent on the motion. 2`、` The response of the Company to the opinions of the Compensation Committee: all the Directors passed the motion in common consent. 2. Report on payment to Directors and Employees as remuneration in 2019.
Date and session of the Committee Meeting	Content of the Report				The result of the report from Compensation Committee and the Response of the Company to the opinions of the members
The 4th Compensati on Committee The 5th session on 2020.1.13	1. Recommendation on the remuneration to the employees and Directors in 2019.				1、 All members acted in common consent on the motion. 2、 The response of the Company to the opinions of the Compensation Committee: all the Directors passed the motion in common consent.
	2. Amendment to the “Regulations Governing the Salaries and Bonus to the Managers”.
	3. The plan for the release of year-end bonus and special bonus to the mangers in 2019.
The 4th Compensati on Committee The 6th session on 2020.8.05	1. The release of pension to Vice President Kuang Sen-Po.				1、 All members acted in common consent on the motion. 2`、` The response of the Company to the opinions of the Compensation Committee: all the Directors passed the motion in common consent.
	2. Report on payment to Directors and Employees as remuneration in 2019.

The Compensation Committee convened once in 2021 (to 2021.04.30 the day on which this report was printed) (A). The attendance of the members is shown below:

Title	Name	Actual attendance (Ｂ)	Attendance by proxy	Actual attendance rate (%) (Ｂ/Ａ) (Note)	Actual attendance rate (%) (Ｂ/Ａ) (Note)
Convener	Chu Min-Hsien	1	0	100%
Members	Wang Feng-Kuei	1	0	100%
Members	Hsu Wen-Hsin	1	0	100%
Additional information: 1. If the Board declines to accept or revise the recommendations of the Remuneration Committee, specify the meeting date, the session, the content of the motion, the resolutions of the Board, and the response of the Company to the opinions of the Remuneration Committee (if the Board resolved a higher level of remuneration than the recommendation of the Remuneration Committee, specify the difference and the reason for the difference): None 2. If a specific member of the Remuneration Committee has adverse or qualified opinions on the resolutions of the Remuneration Committee on record or in written declaration, specify the meeting date, the session, the content of the motion, the opinions of all members, and the response to the opinions of the members: nothing like this happened. 3. Summaryof the Compensation Committee: Date and session of the Committee Meeting Reports and content of the motions The result of the report from Compensation Committee and the Response of the Company to the opinions of the members The 4th Compensation Committee The 7th session on 2021.01.19 1. The report on pension payment to Vice President Lee Li-Chun. 1. All members acted in common consent. 2. Response of the Company to the opinions of the Compensation Committee: all Directors passed the motion in common consent. 2.The plan for the release of year-end bonus and special bonus to the mangers in 2020.
Date and session of the Committee Meeting	Reports and content of the motions				The result of the report from Compensation Committee and the Response of the Company to the opinions of the members
The 4th Compensation Committee The 7th session on 2021.01.19	1. The report on pension payment to Vice President Lee Li-Chun.				1. All members acted in common consent. 2. Response of the Company to the opinions of the Compensation Committee: all Directors passed the motion in common consent.
	2.The plan for the release of year-end bonus and special bonus to the mangers in 2020.

(V) The Pursuit of Corporate Governance and the variation with the Corporate Governance Best Practice Principles for TWSE/TPEx –Listed Companies, and the reason for the

variation.

variation.
Items for evaluation	State ofpursuit(Note 1)			Variance from the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies, and the reason for any such variance
	Yes	No	Summary (Note 2)
I. Does the Company follow the principle of materiality in assessing the environmental, social, and corporate governance risk related to its operation, and map out related risk management policy or strategy? (Note 3)	√		The “Corporate Social Responsibility Committee” of the Company convenes once a year on a scheduled date for performance review, and convenes for discussion of specific issues from time to time. This committee reviews and assess the standards and practices in CSR at regular intervals and controls identified risks for assurance of law compliance. The committee proactively assesses and control risks deriving from operation, financial position, and sustainability and control different uncertain risk factors within tolerable limit through proactive action.	No significant variation
II. Has the Company established a designated full-time (or part-time) body or position for the advocacy of corporate social responsibility administered by the senior management at the empowerment of the Board and reporting to the Board?	√		The Company has established the “Corporate Social Responsibility Committee” under the supervision of the management. Senior officers are responsible for the operation of different terms of the committee, and establish related CSR policy, action plans, and coordinate cross-function works. The committee has reported to the Board on the pursuit of CSR in the session dated 2020.11.06.	No significant variation
III. Environmental Issues (I) Has the Company established an appropriate environmental management system by nature of its industry. (II) Has the Company made efforts for the efficient use of all resources, and used renewable materials for mitigating the impact on the environment? (II) Has the Company assessed the potential risk or opportunity deriving from climate change and its effect on the Company at present and in the future, and mapped out the response to climate related issues?	√ √		(I) The Company has established related environment management systems by nature of the PCB industry. The Company has also established a full set of measures for quality management, occupational safety and health, and environmental protection with the accreditation of the ISO9001 quality system, the IECQ QC080000 HSPM and ISO14001 environmental management system in conformity to the inspection standards of the competent authority and fulfilling the expectation of the public on feedback of enterprises to the society. (II) The Company spares no effort in reducing the consumption of water, and exercises control over the production process to enhance the efficient use of water resources. The Companyalso launches the recyclingand reuse of metallic	No significant variation No significant variation

Items for evaluation	State ofpursuit(Note 1)	State ofpursuit(Note 1)	State ofpursuit(Note 1)	Variance from the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies, and the reason for any such variance
	Yes	No	Summary (Note 2)
(III) Does the Company collect data for greenhouse gas emissions, water usage and waste quantity in the past two years, and set energy conservation, greenhouse gas emissions reduction, water usage reduction and other waste management policies? (IV) Does the Company make statistics on greenhouse gas emissions, water consumption, and total waste weight in the past two years, and formulate policies for energy conservation and carbon reduction, greenhouse gas reduction, water reduction, or other waste management?	√ √		liquid waste to reduce the emission of pollutants. (III) The Company alerts the employees of potential risks and the capacity in response to emergency, control the water consumption volume across the plant, advocates the energy saving and carbon reduction program, enhance the efficient use of energy, and reduce the emission of carbon for mitigating the impact of climate change on the operation and for assurance of reducing risk to the minimal. (IV) The Company keeps statistics on the volume of greenhouse gas emission, water consumption volume, and total weight of solid wastes. The Company is also accredited with the ISO50001 in energy management system and ISO14064-1 in declaration of verification for the effective control of power consumption andgreenhousegas emission.	No significant variation No significant variation
IV. Social Issues (I) Has the Company established related management policies and procedures in accordance with applicable laws and the international human rights conventions? (II) Has the Company established and pursued reasonable welfare policies for the employees (including remuneration, holidays, and other benefits), and reflected the performance or result of operation on the remunerations to the employees? (III) Has the Company provided safe and healthy work environment for the employees, and education on occupational safety and health for the employees at regular intervals?	√ √ √		(I) The Company duly observe applicable labor laws and enforce accordingly to provide different forms of benefits to the employees, and take “Respect humanity and concern for employees” as one vital aspect of its corporate philosophy. (II) The Company has made related policies for employee benefits. Additional information is available at the Annual Report (labor-management relation). The salaries and compensation for the employees are in commensurate with the work experience and education background, professional knowledge and skills, professional seniority and individual performance regardless of gender, race, religion, political stance, marital status, labor union and organization. (III) The Company values occupational safety and health of the employees, and provide education on occupational safety and health, training in fire safety, evaluation for the control of work under hazardous environment, and provide adequate protective gears and equipment. Work environment and the safety of employees under protection is described in the Annual Report (labor-management relation).	No significant variation No significant variation No significant variation

Items for evaluation	State ofpursuit(Note 1)	State ofpursuit(Note 1)	State ofpursuit(Note 1)	Variance from the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies, and the reason for any such variance
	Yes	No	Summary (Note 2)
(IV) Has the Company established the plan for the training of effective career development and planning of the employees? (V) Has the Company complied with applicable legal rules and international standard in marketing labeling of products and services for the health and safety, and privacy of the customers, and has mapped out the policies for the protection of consumer right, and procedures for complaint? (VI) Has the Company established the supplier management policy to demand suppliers to observe applicable rules and regulations governing environmental protection, occupational safety and health, or labor right, and the state of implementation?	√ √ √		(IV) The Company arranges education and training for the employees annually and provides related personnel to take part in internal and external training. For information on the expenses incurred from related training, refer to the Annual Report (labor-management relation`）` (V) The Company has established a customer service unit for responding to customer complaints. The Company has set up a section for “Opinion and Feedback” at its official website for stakeholders to express reasonable opinions. (VI) The Company has included CSR as an integral part in the procedure for the management of suppliers, and evaluates and monitors the practices of the suppliers in the aspect of CSR at regular intervals.	No significant variation No significant variation No significant variation
V. Does the Company refer to international reporting rules or guidelines to publish CSR Report to disclose non-financial information of the Company? Has the said Report acquire 3rd certification party verification or statement of assurance?	√		The Company has been accredited by BSI in AA1000 in category 1 standard evaluation with certificate of declaration: the Company conforms to the core options of GRI standard in 2019.	No significant variation
VI. If the Company has instituted the corporate social responsibility best practice principles in accordance with the “Corporate Social Responsibility Best Practice Principles for the TWSE/TPEx-listed Companies”, specify the implementation of these principles and the variation with the Corporate Social Responsibility Best Practice Principles for the TWSE/TPEx-listed Companies: No significant variation
VII. Any other vital information that could help to understand the performance of corporate social responsibility better: For further information,visit the website of the Company (www.pcbut.com.tw).
Note 1: If “yes” is chosen, specify the essential policy, strategy, measures and pursuit. If “no” is chosen, give the reasons, and elaborate related policy, strategy and measures under planning for the future. Note 2: The Company has compiled the CSR Report. The note specified the means for access to the CSR Report and the index for the pages of the report. Note 3: Principle of materiality refers to issues related to the environment, society, and corporate governance have significant influence on the investors and stakeholders of the Company.

(VI) The Practice of Ethical Corporate Management and Related Policies and Variation From the Ethical Corporate Management Best Practice Principles for TWSE/TPEx-listed Companies, Variation From the Ethical Corporate Management Best Practice Principles for TWSE/TPEx-listed Companies

Items for evaluation	State ofpursuit(Note 1)	State ofpursuit(Note 1)	State ofpursuit(Note 1)	Variance from the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies , and the reason for any such variance
	Yes	No	Summary
I. Establishment of Corporate Conduct and Ethics Policy and Implementation Measures (I) Does the company have a clear ethical corporate management policy approved by its Board of Directors, and bylaws and publicly available documents addressing its corporate conduct and ethics policy and measures, and commitment regarding implementation of such policy from the Board of Directors and the top management team? (II) Has the Company developed the mechanisms for the assessment of integrity risk with routine analysis and assessment on business activities exposed to higher integrity risk in the operation basing on which the Company planned for the prevention of unethical practices. The content shall cover at least the preventive measures contained in Paragraph 2 in Article 7 of the “Ethical Corporate Management Best Practice Principles for TWSE Listed and TPEx Listed Companies”? (III) Has the Company established plans for the prevention of unethical practices, and has it specified the operation procedures, code of conduct, and punishment for violation, and the system of complaints in the plans and properly implemented these plan with routine review and revision?	√ √ √		(I) The Company has instituted the “Ethical Corporate Management Best Practice Principles” and the “Ethical Corporate Management Procedure and Code of Conduct” passed by the Board and disclosed at the official website of the Company and MOPS. Directors, Independent Directors, and senior corporate officers at the rank of Vice President and higher have issued the “Declaration of Compliance with the Ethical Corporate Management Policy of Unitech Printed Circuit Board Corp.” (II) The Company has instituted the “Ethical Corporate Management Best Practice Principles” and the “Ethical Corporate Management Procedure and Code of Conduct” and has explicitly stated in the Service Regulations. (III) The Company duly observe the “Ethical Corporate Management Best Practice Principles”, the “Ethical Corporate Management Procedure and Code of Conduct”, and “CSR Manual - Ethic Code”, including (1)Business ethics; (2) no unjustified benefits; (3) information transparency; (4) Intellectual property right; (5) fair trade, advertising and competition, and (6) confidentiality of identity.	No significant variation No significant variation No significant variation
II. Ethical Corporate Management in Practice (I) Whether the company has assessed the ethics records of whom it has business relationship with and include business conduct and ethics related clauses in the business contracts? (II) Has the Companyestablished a designated bodydirectlyunder	√ √		(I) CSR is included in the supplier management procedure under the policy of the Company with routine evaluation and monitoring of the practices of the suppliers in CSR. (II)The “CSR Committee” coordinates the advocacyof the	No significant variation No significant variation

Items for evaluation	State ofpursuit(Note 1)	State ofpursuit(Note 1)	State ofpursuit(Note 1)	Variance from the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies , and the reason for any such variance
	Yes	No	Summary
the Board for administering ethical corporate management with routine report to the Board (at least once a year) on the pursuit of the ethical corporate management policy and the plans for the prevention of unethical practices, and the supervision of the implementation of these policies? (III) Whether the company has established policies to prevent conflict of interests, provide appropriate communication and complaint channels and implement such policies properly? (IV) Has the Company established effective accounting system, internal control system, for the proper pursuit of ethical corporate management. Has the internal audit function designed relevant audit plan on the basis of the assessment result of integrity risk for the prevention of unethical practices and compliance of related rules and regulations, or commissioned certified public accountants to conduct audits on unethical practices? (V) Has the Company provided internal and external training on topics of business integrity?	√ √ √		institution and supervision of the pursuit of the ethical corporate management policy and preventive plans. The President acts as the convener of the committee charged with the duties as stated in Article 17 of the “Ethical Corporate Management Best Practice for TWSE/TPEx-listed Companies” and report to the Board on the pursuit of CSR at least once a year usually in the last session of the Board in each fiscal year. (III) The Company prohibits any form of corruption, extortion, blackmail, embezzlement, gratuity, kickback or any other illicit benefits. Each and everyone of the Company has the right to report and inform the Administration Business Unit for investigation. (IV) The Company has established related accounting and internal control system, with internal auditors conduct routine audits. (V) The Legal Affairs Office of the Company provides education for the employees every year.	No significant variation No significant variation No significant variation
III. Implementation of Complaint Procedures (I) Has the Company established substantive reporting and reward and punishment system and channels convenient for reporting, and has appointed designated personnel for handling the targets of report? (II) Has the Company established standard operation procedure for responding to reports and complaints, the measures to be taken after the investigation, and related mechanisms for confidentiality?	√ √		(I) The Company has instituted the regulations governing the complaints of the employees, and established convenient channels for report and complaints, and appoints Administration Business Unit to respond to all reports and complaints. (II) The Company has instituted the regulations governing the complaints of employees, and keep all cases of complaints in strict confidence.	No significant variation No significant variation

Items for evaluation	State ofpursuit(Note 1)	State ofpursuit(Note 1)	State ofpursuit(Note 1)	Variance from the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies , and the reason for any such variance
	Yes	No	Summary
(III) Has the Company taken any measure for the protection of the informants from suffering undue treatment?	√		(III)The Company keeps the identity of the informants in strict confidence, and protect the informants from attack, revenge,and other discriminatorytreatment.	No significant variation
IV. Enhanced Information Disclosure (I) Does the company disclose its ethical corporate management best practice principles as well as information about implementation of such guidelines on its website and Market Observation Post System(“MOPS”)?	√		The Company has disclosed the content of its Ethical Corporate Management Best Practice Principles at its official website and MOPS. And had appointed designated personnel to maintain and update the data.	No significant variation
V. If the Company has instituted the Ethical Corporate Management Best Practice Principles in accordance with the “Ethical Corporate Management Best Practice Principles for TWSE/TPEx-listed Companies”, specify the implementation of the principles and any variation, if applicable: (I) The principles in operation and achievement in the year: 1. The Board passed the “Ethical Corporate Management Procedure and Code of Conduct” on 2021.03.30. 2. Directors, Independent Directors, and senior corporate officers at the rank of Vice President and higher have issued the “Declaration of Compliance with the Ethical Corporate Management Policy of Unitech Printed Circuit Board Corp.” 3. The Legal Affairs Office advocates the education for the employees and put together the information on Ethical Corporate Management Best Practice Principles, Ethical Corporate Management Procedure and Code of Conduct and related regulations to remind the employees in their engagement in business activities. (II)No significant variation.
VI. Any other important information that help to understand the implementation of the Ethical Corporate Management Best Practice Principles better: (Such as the review and amendment to the Ethical Corporate Management Best Practice Principles ). For additional information,visit the website of the Company (www.pcbut.com.tw)
Note 1: Specify in the field provided on the status of operation whether “yes” or “no” was chosen.

(VII) If the Company has instituted the best practice principles for corporate governance, disclose the means of inquiry: For additional information, visit the website of the Company (www.pcbut.com.tw).

(VIII) Any other vital information that helps to understand better the pursuit of corporate governance by the Company: For additional information, visit the website of the Company (www.pcbut.com.tw).

The Company has approved to set up the position of Corporate Governance Officer in a Board session dated 2020.04.28 (Vice President Chin-Fang Wu, head of accounting and finance, was appointed to the position). The continuing education and related training is specified below:

Date of training	Provider of training	Content of the courses	Hours of training	Total hours
2020.10.23	Taiwan Stock Exchange Corporation	2020 Corporate Governance and Supervision of Ethical Corporate Management Conference	3 hours	18 hours
2021.01.26 2021.01.27	Securities and Futures Institute	Seminar for the Practice of Directors, Supervisors (including Independent Directors) and Corporate Governance Officers.	12 hours
2021.03.24	Taiwan Academy of Banking and Finance	Lecture of Corporate Governance - Post-Pandemic Global Economic Trend	3 hours

Corporate Governance Officer shall receive at least 18 hours of training after assuming this position except for the first time practitioners in this position with 1 years from the day of office (to 2021.04.28), and shall take at least 12 hours of training every year.

(IX) The pursuit of internal control system should be disclosed with the following:
Statement of Declaration of Internal Control

Unitech Printed Circuit Board Corp.

Declaration of Internal Control

Date: 2021.03.30

The Company has conducted self-assessment of its internal control system in the period from January 1
to December, 2020 and hereby declares as follows: I. The Company is aware that the Board of Directors and management are responsible for establishing, implementing, and maintaining an adequate internal control system. The purpose it to reasonably ensure the effect and efficiency of operation (including profitability, performance and security of assets), the reliability of financial reporting and the compliance with relevant legal rules.

II. An internal control system has inherent limitations. No matter how perfectly designed, an effective internal control system can provide only reasonable assurance of accomplishing its stated objectives. Moreover, the effectiveness of an internal control system may be subject to changes due to extenuating circumstances beyond our control. Nevertheless, our internal control system contains self-monitoring mechanisms, and the Company takes immediate remedial actions in response to any identified deficiencies. III. The company judges the effectiveness of the internal control system in design and enforcement in accordance with the “Criteria for the Establishment of Internal Control System of Public Offering Companies” (hereinafter referred to as “the Criteria”). The Criteria is instituted for judging the effectiveness of the design and enforcement of internal control system. There are five components of effective internal control as specified in the Criteria with which the procedure for effective internal control are composed by five elements, namely, 1.control environment, 2. Risk Evaluation, 3. Control Operation, 4. Information and Communication, and 5. Monitoring. Each component includes several items. For the said items, please refer to the Regulations. IV. The Company has evaluated the design and operating effectiveness of its internal control system according to the aforesaid Regulations. V. Basing on the aforementioned audit findings, the company holds that it has reasonably preserved the achievement of the aforementioned goals within the aforementioned period of internal control (including the monitoring over the subsidiaries) as of December 31 2020, including the effectiveness and efficiency in operation, reliability in financial reporting and compliance with relevant legal rules, and that the design and enforcement of internal control are effective. VI. This Statement is an integral part of the Company’s Annual Report and prospectus, and will be made public. Any falsehood, concealment, or other illegality in the content made public will entail legal liability under Articles 20, 32, 171, and 174 of the Securities and Exchange Act. VII. The content of this Declaration has been approved by the Board in the session dated 2021.03.30 with the attendance of 7 Directors in common consent. Unitech Printed Circuit Board Corp. Chairman: Chang Yuan-Min (signature) President: Hung Hsien-Ching (signature)

Review report on appointment of CPAs to examine the internal control system: None.
(X) The punishment on the Company and staff due to the violation of laws, the punishment on Company staff due to the violation of the internal control system in the previous period to the day this report was printed, the major defect and status of corrective action: None.
(XI) Major decisions of the Shareholders Meeting and the Board in the previous period to the day this report was printed:

General Meeting of Shareholders in 2020

The motion for passing the 2019 Business Report and Financial Statement.

Status: motion passed.

The proposal for the distribution of earnings in 2019

Implementation status: 2020.08.29 was set as the base day for dividend. Payment was completed in full amount by

2020.09.08. (Cash payment at $0.8/share).

(XII) The summary of adverse opinions of the Directors or Supervisors on the resolutions of the Board with record or in written declaration in the previous period to the day this report was printed: None.
(XIII) Resignation or discharge of Chairman, President, Chief Accounting Officer, Chief Financial Officer, Chief Internal Auditor, Corporate Governance Officer, and Chief R&D Officer of the Company in the previous period to the day this report was printed: None

V. Information of audit fee for Independent Auditors

Payment scale for service charge to CPAs

Name of CPA Office	Name of CPA Office	Name	of CPA	Auditperiod	Auditperiod
KPMG Taiwan		Wang Ching-Sung	Chuang Chun-Wei	2020.01.01~2020.12.31
				CurrencyUnit: NT$1,0000
Items of audit service Range of Amount			Audit Fee	Non-audit Fee	Total
1	Less than NTD2,000 thousand			√
2	NTD 2,000 thousand (inclusive) to NTD 4,000 thousand
3	NTD 4,000 thousand (inclusive) to NTD 6,000 thousand		√		√
4	NTD 6,000 thousand (inclusive) to NTD 8,000 thousand
5	NTD 8,000 thousand (inclusive) to NTD 10,000 thousand
6	Over NTD 10,000 thousand (inclusive)

(I) The payment to the independent auditors, the CPA office of the independent auditors and its affiliates for non-audit service accounted for more than 1/4 of the audit fee: non-audit fees are service charge for transfer pricing report amounted to NT$500 thousand, translation fee for English Financial Report amounted to $170,000, which falls below 1/4 of the of the audit fee.
(II) Replacement of independent auditors and the payment for audit fee in the year of replacement is less than the year before replacement, disclose the amount paid before and after the replacement, and the reason: None.

(III) The audit fee is more than 10% less than the previous period: none. VI. Information on replacement of independent auditors: None

(I) The predecessor CPAs

I) The predecessor CPAs
Date of replacement	Passed by the Audit Committee and the Board on 2021.03.30 Applicable to Financial Statements ofQ1 2021.
Reason for the change	The Company replaced the previous Independent Auditors of Chuang Chun-Wei (CPA) and Wang Ching-Sung (CPA) with Chuang Chun-Wei (CPA) and Hsu Ming-Fang (CPA) in conjunction with the internaljob rotation of KPMG Taiwan.
Explain if the Client or the CPA terminated or turned down the appointment	Parties concerned Situation			CPA	Client
	Voluntary termination of the appointment			Not applicable	Not applicable
	Turn down (continue) the appointment			Not applicable	Not applicable
Auditors’ Reports with opinions other than unqualified opinions in the last 2 years, and the reasons for the opinions.	Not	applicable
Different opinions with the issuer	yes		Accounting principles or practice
			Disclosure of financial statements
			Scope or procedure of audit
			Others

	Non e	V
	Description:(None)
Other information (To be disclosures pursuant to part 1- (4)~(7) of Subparagraph 6 under Article 10 of the principles).	Not applicable

(II) Information on the successor CPA

(II) Information on the successor CPA
Name of CPA Office	KPMG Taiwan
Name of CPA	ChuangChun-Wei,CPA;Hsu Ming-Fang,CPA
Date of appointment	Applicable to financial statements ofQ1 2021.
Consultation and result of possible audit opinion deriving from the accounting method or accounting principles and financial statement on designated transactions before the appointment.	Not applicable, CPAs are in routine job rotation.
Written opinions of the successor CPAs different from thepredecessor CPAs.	Not applicable, CPAs are in routine job rotation.

(III) Reply of the predecessor CPAs on particular inscribed in part 2 and part 1- (3) of Subparagraph 6 under Article 10 of the principles: note applicable.

VII. The Chairman, General Manager, the managers in charge of finance or accounting who has been employed by the

CPAs office of the independent auditors or its affiliates in the previous period: None.

VIII. Any transfer of equity interests and/or pledge of or change in equity interests by a director, supervisor, managerial officer, or shareholder with a stake of more than 10 percent in the previous period to the day this report was printed: None

(1) Transfer and pledge of equity shares Unit: share

Title	Name	2020	2020	2021 to April 25	2021 to April 25
		Changes in the quantity of shares held	Changes in quantity of shares pledged	Changes in the quantity of shares held	Changes in quantity of sharespledged
Chairman	Kuo-LingInvestment Co.,Ltd.	0	0	0	0
	Representative: Chang Yuan-Min	0	0	0	0
Vice Chairman	Taichung Harbor Warehousing StevedoringCo.Ltd.	0	0	0	0
	Representative: ChangYuan-Fu	0	0	0	0
Director	Kuo-LingInvestment Co.,Ltd.
	Representative: Chen Cheng-Hsiung	(75,000)	0	(90,000)	0
Director	Ke Wen-Sheng	0	0	0	0
Independent Director	Chu Min-Hsien	0	0	0	0
Independent Director	Wang Feng-Kuei	0	0	0	0
Independent Director	Hsu Wen-Hsin	0	0	0	0
Manager	HungHsien-Ching	0	0	0	0
Manager	Liao Chi-Ming	(140,000)	0	0	0
Manager	Chen Hsi-Meng	(9,000)	0	0	0
Manager	ChungShou-Pu	0	0	0	0
Manager	Chin-FangWu	0	0	0	0
Manager	Lee Li-Chun (Retired on 2929.11.13)	(464,000)	0	Not applicable	Not applicable
Manager	Tsai Tung-He	0	0	0	0

(2) The counterparties of equity share transfer by the Directors, Supervisors, managers, and dominant shareholders are related-parties: None

(3) The counterparties the pledge of equity share transfer by the Directors, Supervisors, managers, and dominant shareholders are related-parties: None

IX. The top 10 shareholders by shareholding who are related-party, spouse, next of kind to one another:

		2021.04.25	2021.04.25	2021.04.25	2021.04.25	2021.04.25	2021.04.25	2021.04.25	2021.04.25	2021.04.25
Name (Note 1)		Shares held by myself		Shareholding by spouse, underage children		Shares held in the name of a third party in total		If the top 10 shareholders by shareholding who are related-party, spouse, next of kind to one another, specify the names and relations.(Note 3)		Remark
		Quantity of shareholding	Proportion of shareholding	Quantity of shareholding	Proportion of shareholding	Quantity of shareholding	Proportion of shareholding	Title (or name)	Relation
Kuo-Ling Investment Co., Ltd.	--	36,950,280	5.97%	--	--	--	--	Chen Shu-Chu	Chairperson of the Company
								Chang Ping-Chao	Director of the Company
								Chang Yuan-Min	Director of the Company
								Chang Yuan-Fu	Supervisor of the Company
	Representative of Kuo-Ling Investment Co.,Ltd.: Chang Yuan-Min	966,332	0.16%	--	--	--	--	Chang Ping-Chao	Father and son
								Chen Shu-Chu	Mother and son
								Chang Yuan-Fu	Brother
								Kuo-Ling Investment Co.,Ltd.	Director of the Company
	Representative of Kuo-Ling Investment Co.,Ltd.: Chen Cheng-Hsiung	5,006,465	0.81%	547,989	0.09%	--	--	Chang Ping-Chao	Relative by marriage
								Chen Shu-Chu	Elder sister and younger brother
								Shang-Ling Investment Co.,Ltd.	Supervisor of the Company
Shang-Ling Investment Co., Ltd.	--	18,154,144	2.93%	--	--	--	--	Chang Ping-Chao	Chairperson of the Company
								Chen Shu-Chu	Director of the Company
								Kuo-Ling Investment Co.,Ltd.	Director of the Company
								Chang Yuan-Fu	Director of the Company
								Chen Cheng-Hsiung	Supervisor of the Company
	Representative of Shang-Ling Investment Co., Ltd. Chang Ping-Chao	6,187,875	1.00%	1,493,162	0.24%	--	--	Chang Yuan-Min `、`Chang Yuan-Fu	Father and son
								Kuo-Ling Investment Co.,Ltd.	Director of the Company
								Chen Cheng-Hsiung	Relative by marriage
Song-Ling Investment Co., Ltd.	--	8,886,428	1.44%	--	--	--	--	Shang-Ling Investment Co., Ltd.	Supervisor of the Company
	Representative of Song-Ling Investment Co.,Ltd.:	--	--	--	--	--	--	--	--

	Liao Ying-Huei
Special account of Vanguard Newly Emerged Market Stock Index Fund in custody American Bank	--	8,173,880	1.32%	--	--	--	--	--	--
Advanced Starlight Advanced Aggregate International Stock Index in the Custody of Chase Bank	--	7,947,956	1.28%	--	--	--	--	--	--
Chang Ping-Chao	--	6,187,875	1.00%	1,493,162	0.24%	--	--	Chang Yuan-Min `、`Chang Yuan-Fu	Father and son
								Chen Cheng-Hsiung	Relative by marriage
								Kuo-Ling Investment Co.,Ltd.	Director of the Company
								Shang-Ling Investment Co.,Ltd.	Chairperson of the Company
Chen Cheng-Hsiung	--	5,006,465	0.81%	547,989	0.09%	--	--	Chang Ping-Chao	Relative by marriage
								Chen Shu-Chu	Elder sister and younger brother
								Shang-Ling Investment Co.,Ltd.	Supervisor of the Company
Chang Yuan-Fu	--	3,718,781	0.60%	60,392	0.01%	--	--	Chang Ping-Chao	Father and son
								Chen Shu-Chu	Mother and child
								Chang Yuan-Min	Brother
								Kuo-Ling Investment Co.,Ltd	Supervisor of the Company
								Shang-Ling Investment Co.,Ltd.	Director of the Company
Huang Cong-meng	--	3,002,000	0.49%	--	--	--	--	--	--
New Labor Retirement Fund	--	2,958,580	0.48%	--	--	--	--	--	--

Note 1: List out all the top 10 shareholders. For institutional shareholders, list out the names of the shareholders and the representatives respectively.

Note2: The proportion of shareholding shall be calculated on the basis of the holding by the shareholder, in the name of spouse, children who are minors, and in the name of a third party in totality.

Note3: The aforementioned list of shareholders shall include institutional shareholders and natural persons, with the disclosure of relation in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Note 4: The above figures on shareholders was quoted on 2021.04.25, the day on which transaction of shares was prohibited.

X. The quantity and proportion of shares held by the Directors, Supervisors, managers, and direct or indirect controlled entities of the Company on particular company in aggregate.

Unit: share; % 2020.12.31

					Unit: share; % 2020.12.31	Unit: share; % 2020.12.31
Direct Investment (Note)	Investment of the Company		Investment of the Directors, Supervisors, Managers and direct or indirect controlled entities		Overall investment
	Quantity of shareholding	Proportion of shareholding.	Quantity of shareholding	Proportion of shareholding.	Quantity of shareholding	Proportion of shareholding.
UNITECH(BVI)	3,750	100.00%	---	---	3,750	100.00%
UNITECH(HK)	5,000,000	6.1%	77,000,100	93.9%	82,000,100	100.00%
Da-Tai Investment Co., Ltd.	82,000,000	100.00%	---	---	82,000,000	100.00%
Fulltech Fiber Grass Corp.	2,539,912	0.61%	57,733,620	13.82%	60,273,532	14.42%

Note: Long-term investment of the Company accounted for under the equity method.

Four. Offering of shares of raising capital

I. Source of capital stock
(I) Type of shares

Unit: share No share transaction from 2021.04.25

Shares Type of shares	Stated capital	Stated capital	Stated capital	Remark
	Outstanding shares (listed at TWSE)	Unissued shares	Total
Common shares	619,407,175 shares	80,592,825 shares	700,000,000 shares	The Company has stated capital of NT$7,000,000,000 under the Articles of Incorporation

(II) Formation of capital stock

Year month	Issuing price (NTD)	Stated capital	Stated capital	Paid-in capital	Paid-in capital	Remark	Remark	Remark
		Quantity of shareholding	Amount	Quantity of shareholding	Amount	Sources of capital stock	Investment in kind with other assets other than cash	Others
1984.12	10	12,000,000	120,000,000	9,600,000	96,000,000	Founding	None	---
1986.1	10	12,000,000	120,000,000	12,000,000	120,000,000	Raised capital of $24,000 thousand through offering new shares	None	---
1987.1	10	15,000,000	150,000,000	15,000,000	150,000,000	Raised capital of $30,000 thousand through offering new shares	None	---
1989.6	10	19,500,000	195,000,000	19,500,000	195,000,000	Capitalization of retained earnings into new shares amounting to $45,000 thousand	None	---
1991.4	10	60,000,000	600,000,000	42,000,000	420,000,000	Raised capital of $145,000 thousand through offering new shares Capitalization of retained earnings into new shares amounting to $80,000 thousand	None	---
1995.5	10	60,000,000	600,000,000	60,000,000	600,000,000	Raised capital of $180,000 thousand through offering new shares	None	---
1996.11	20	150,000,000	1,500,000,000	100,671,100	1,006,711,000	Raised capital of $220,000 thousand through offering new shares Capitalization of retained earnings	None	---

						into new shares amounting to $186,711 thousand
1997.7	10	150,000,000	1,500,000,000	140,000,000	1,400,000,000	Capitalization of retained earnings into new shares amounting to $292,617,900 Capitalization of capital surplus into new shares amounting to $100,671,100	None	---
1998.9	82	320,000,000	3,200,000,000	237,800,000	2,378,000,000	Raised capital of $400,000,000 through offering new shares Capitalization of retained earnings into new shares amounting to $454,800,000 Capitalization of capital surplus into new shares amounting to $123,200,000	None	---
1999.7	10	320,000,000	3,200,000,000	299,200,000	2,992,000,000	Capitalization of retained earnings into new shares amounting to $304,860,000 Capitalization of capital surplus into new shares amounting to $309,140,000	None	---
2000.7	10	344,750,000	3,447,500,000	344,750,000	3,447,500,000	Capitalization of retained earnings into new shares amounting to $186,220,000 Capitalization of capital surplus into new shares amounting to $269,280,000	None	---
2001.10	10	500,000,000	5,000,000,000	362,141,200	3,621,412,000	Capitalization of retained earnings into new shares amounting to $4,580,000 Capitalization of capital surplus into new shares amounting to $169,332,000	None	---
2003.12	10	500,000,000	5,000,000,000	356,055,200	3,560,552,000	Reduced treasury shares amountingto$60,860,000	None	---
2005.10	10	500,000,000	5,000,000,000	381,783,215	3,817,832,150	Capitalization of retained earnings into new shares amounting to $85,760,050 Capitalization of capital surplus into new shares amounting to $171,520,100	None	---
2006.9	10	500,000,000	5,000,000,000	404,863,725	4,048,637,250	Capitalization of retained earnings into new shares amounting to $230,805,100	None	---
2008.2	10	500,000,000	5,000,000,000	420,883,140	4,208,831,400	Conversion of convertible bonds into common shares $160,194,150	None	---
2008.8	10	500,000,000	5,000,000,000	448,291,247	4,482,912,470	Capitalization of retained earnings into new shares amounting to $274,081,070	None	---
2011.1	10	500,000,000	5,000,000,000	444,170,247	4,441,702,470	Reduced treasury shares amountingto$41,210,000	None	---
2011.3	10	500,000,000	5,000,000,000	449,747,711	4,497,477,110	Conversion of convertible bonds into common shares $55,774,640	None	---
2011.6	10	600,000,000	6,000,000,000	549,747,711	5,497,477,110	Raised capital of $1,000,000,000 through issuingnew shares	None	---
2011.7	10	700,000,000	7,000,000,000	579,029,399	5,790,293,990	Conversion of convertible bonds into common shares $292,816,880	None	---
2013.1	10	700,000,000	7,000,000,000	571,793,399	5,717,933,990	Reduced treasury shares amountingto$72,360,000	None	---
2013.8	10	700,000,000	7,000,000,000	569,118,399	5,691,183,990	Cancellation of treasury shares amountingto$26,750,000	None	---
2014.11	10	700,000,000	7,000,000,000	566,318,399	5,663,183,990	Reduced treasury shares amountingto$28,000,000	None	---
2015.11	10	700,000,000	7,000,000,000	555,965,399	5,559,653,990	Reduced treasury shares amounting to $51,110,000 Reduced treasury shares amountingto$52,420,000	None	---
2017.1	10	700,000,000	7,000,000,000	540,018,399	5,400,183,990	Reduced treasury shares amounting to $100,000,000 Reduced treasury shares amountingto$59,470,000	None	---

2017.5	10	700,000,000	7,000,000,000	540,028,369	5,400,283,690	Conversion of convertible bonds to common shares $99,700	None	---
2017.8	10	700,000,000	7,000,000,000	543,747,201	5,437,472,010	Conversion of convertible bonds to common shares $37,188,320	None	---
2017.11	10	700,000,000	7,000,000,000	544,295,555	5,442,955,550	Conversion of convertible bonds to common shares $5,483,540	None	---
2018.2	10	700,000,000	7,000,000,000	600,999,060	6,009,990,600	Conversion of convertible bonds to common shares $567,035,050	None	---
2018.4	10	700,000,000	7,000,000,000	607,261,936	6,072,619,360	Conversion of convertible bonds to common shares $62,628,760	None	---
2018.8	10	700,000,000	7,000,000,000	619,407,175	6,194,071,750	Capitalization of retained earnings into new shares amounting to $121,452,390	None	---

(III) Information on the overall declaration system: note applicable. II. Component of shareholders

No share transaction from 2021.04.25

Structure of shareholders Quantity	Government institutions	Financial institutions	Other institutions	Foreign institutions and foreign nationals	Individuals	Total
Number of shareholders	3	7	164	156	92,286	92,616
Quantity of shares held	2,958,592	2,411,935	69,460,841	50,505,484	494,070,323	619,407,175
Proportion of shareholding.	0.48%	0.39%	11.21%	8.15%	79.77%	100.00%

III. Dispersion of equity 1. Common shares

NT$10/share; no share transaction on 2021.04.25

Level of shareholding	Number of shareholders	Quantity of shareholding	Proportion of shareholding
1 to 999	31,383	3,108,196	0.50%
1,000 to 5,000	43,458	98,475,169	15.91%
5,001 to 10,000	9,253	74,036,464	11.95%
10,001 to 15,000	2,930	37,059,530	5.98%
15,001 to 20,000	1,907	35,809,561	5.78%
20,001 to 30,000	1,456	37,676,222	6.08%
30,001 to 40,000	685	24,615,344	3.97%
40,001 to 50,000	446	20,983,849	3.39%
50,001 to 100,000	658	47,541,488	7.68%
100,001 to 200,000	248	34,300,252	5.54%
200,001 to 400,000	105	28,806,562	4.65%
400,001 to 600,000	30	14,701,218	2.37%
600,001 to 800,000	9	6,075,083	0.98%
800,001 to 1,000,000	11	9,949,203	1.61%
More than 1,000,001	37	146,269,034	23.61%
Total	92,616	619,407,175	100.00%

2. Preferred shares: none

IV. List of Dominant Shareholders (Shareholders holding more than 5% of the outstanding shares or among the top 10 shareholders by ratio of equity in holding)

	Shareholding Name of dominant shareholders	Quantity of shareholding	Proportion of shareholding

Kuo-LingInvestment Co.,Ltd.	36,950,280	5.97%
Shang-LingInvestment Co.,Ltd.	18,154,144	2.93%
Song-LingInvestment Co., Ltd.	8,886,428	1.44%
Special account of Vanguard Newly Emerged Market Stock Index Fund in custodyAmerican Bank	8,173,880	1.32%
Advanced Starlight Advanced Aggregate International Stock Index in the Custodyof Chase Bank	7,947,956	1.28%
ChangPing-Chao	6,187,875	1.00%
Chen Cheng-Hsiung	5,006,465	0.81%
ChangYuan-Fu	3,718,781	0.60%
HuangCong-meng	3,002,000	0.49%
New Labor Retirement Fund	2,958,580	0.48%

Note: The above figures of shareholding in quantity were quoted on 2021.04.25, the day on which share transaction was prohibited.

V. Market price, net value, earnings (loss) per shares and related information in the last 2 years

Unit: NTD/1,000 shares

						Unit: NTD/1,000 shares
Item	Year			2019	2020	As of 2021.03.31
Market price per share (Note 1)	High			39.15	34.15	23.95
	Low			13.20	15.4	19.6
	Average			24.82	24.04	21.54
Net value per share (Note 2)	Cum-dividend			18.27	---	---
	Ex-dividend			17.47	---	---
Earnings per share (Note 3)	Weighted average number of shares			619,407	619,407	619,407
	Earnings per share		Retroactive to cum-dividend	2.80	(2.32)	1.89
			Retroactive to ex-dividend	--	---	---
Dividend per share	Cash dividend			0.8	---	---
	Stock dividend	Stock dividend from capitalization of retained earnings		---	---	---
		Stock dividend from capitalization of capital reserve		---	---	---
	Unpaid dividend in accumulation			---	---	---
Analysis	P/E ratio			8.86	---	---
	P/P ratio			31.025	---	---
of ROI	Cash dividend yield rate			3.22%	---	---

VI. Dividend policy and implementation

1. Dividend Policy

According to the Articles of Incorporation of the Company, the Board shall resolve to appropriate 1 ~5% of the earnings of the Company, where applicable, as remuneration to the employees and no more than 3% as remuneration tot he Directors. However, the Board shall appropriate for loss carried forward from the previous period, followed by the appropriation of the remainder of the surplus in the aforementioned ratios.

If there is a surplus from account settlement in the year, the Company shall appropriate for the payment of applicable taxes and covering carryforward loss, followed by the appropriation of 10% as mandatory reserve, and the appropriation or reversal of special reserve under applicable legal rules or the requirement of the competent authority. The remainder shall be pooled up with the undistributed earnings carried forward from the previous period. The Board shall then map out a proposal for the distribution of the earnings and present to the Shareholders Meeting for approval of payment as dividend to shareholders.

The dividend policy is based on the surplus for dividend policy in light of the need in business development and expansion, in line with the long-term financial planning of the Company for sustainability and stable corporate development. This is mainly based on the capital budgeting and the capital requirements in subsequent years of the Company where the retained earnings will be used to finance subsequent capital requirement. Only the surplus by then

will be paid as dividend. The distribution process is specified below:

  - (1) Optimal capital budgeting.

  - (2) Decision on adequate fund for meeting the financing need of the aforementioned capital budgeting.

  - (3) Decision on using the retained earnings to finance the amount of capital requirement as mentioned (the amount short could be filled by raising new capital by offering new shares or issuing corporate bonds).

  - (4) Specific proportion of the remainder should be retained for operation need, followed by payment as dividend to shareholders.

     - The payment of stock dividend will be conditioned by the state of capital utilization whereby an appropriate ratio between cash dividend and stock dividend for the year will be mapped out of which cash dividend shall account for 50~100% while stock dividend shall account for 50~0% of the total dividend.

Dividend resolved to pay in this year: None.
Anticipated change in dividend policy at significant level: None.
VII. Influence of stock dividend planned to pay out as resolved by this General Meeting of Shareholders on the operation performance and financial position of the Company: not applicable.
VIII. Remuneration to the employees and Directors
Percentage or scope of remuneration to the employees and Directors as inscribed in the Articles of Incorporation of the Company: as specified in VI. Note to Dividend Policy.
The basis of estimating the amount of remuneration to the employees and Directors in current period, the basis for the calculation of the quantity of shares for release to employees and the accounting treatment of the difference of the estimated amount and the actual amount paid: the amount of remuneration to the employees and Directors is based on the earnings before taxation in current period, multiply by the percentage as inscribed in the Articles of Incorporation. In case of discrepancy between the actual amount paid and the estimated amount, the difference will be recognized as the profit or loss in the year of payment.
The resolution of the Board in effecting remuneration:
(1) Amount of remuneration to the employees and Directors in the form of cash or stock. .If there is a discrepancy between the estimated amount in the year of recognition, disclose the amount difference, the reason, and the response to the situation:
The Company did not have any plan for remuneration to the employees and Directors in 2020. This rule is not applicable to this context.
(2) The amount of remuneration to the employees in stock in proportion to the net income stated in the Separate Financial Statement and the ratio to the total amount of remuneration to the employees: The Company did not have any plan for remuneration to the employees in stock in current period. This rule is not applicable to this context.
The remuneration effected in favor of the employees, Directors, and Supervisors in the previous period (including the quantity of shares released, the amount and stock price), and the difference from the amount recognized for remuneration to employees, Directors, and Supervisors, the reason for the difference and the response to the situation:

Item for distribution	Actual distribution	Recognition year of the expense (2019)	Amount difference	Reason for the difference and response
Remuneration to employees	43,158,625	45,000,000	(1,841,375)	The difference is treated as change in accounting estimate, And was recognized as profit of loss in 2020.
Remuneration to Directors and Supervisors	23,000,000	23,000,000	0	No difference

IX. The Company repurchased the shares it issued: None

X. Issuance of corporate bonds (including offshore corporate bonds): None

XI. Issuance of preferred shares: None

XII. Participation in the issuance of overseas depository receipts: None

XIII. Issuance of employee stock options: None

XIV. Issuance of restricted employee new shares: None

XV. Acquisition or acceptance of assigned new shares from other companies: None

XVI.. Implementation of the fund utilization plan: None.

Five. Operation Highlight

I. Content of business

(I) Scope of Business
Summary content of principal business
(1) Manufacturing and trading of multi-layer PCB, HDI PCB, Rigid-Flex PCB.
(2) Distribution, import and export of domestic and foreign manufacturers of the above products.
Carrying items of the Company in proportion to the overall business
(1) Product: Double-side PCB, multi-layer PCB
(2)Proportion to operation: Unit: NT$ thousand; %

Item name	Revenue in 2020	Proportion to overall business
Double-side PCB	218,799	1.68%
4-layer PCB	1,635,919	12.53%
6-layer PCB	2,487,965	19.06%
8-layer PCB	1,498,841	11.48%
10-layer + PCB	7,098,660	54.39%
Others	111,763	0.86%
Total	13,051,947	100%

New items in planning of development
(1) PTFE antennae board development.
(2) Small cell PCB development.
(3) AR/VR FPCB development.
(II) Industry Outlook
Industry Outlook and Prospect

According to the statistics on the research released by Taiwan Printed Circuit Association (TPCA), the production value of PCB in Taiwan amounted to NT$696.3 billion in 2020, which was an increase of 5.1% from NT$662.4 billion from the same period of 2019. The production value was unprecedented high and exhibited the trend of growth in 4 consecutive years.

The production value of Taiwan firms on both sides of the straits was affected by the pandemic. The proportion in Mainland China was 60.7% in the 1[st] quarter, and was up to 64.0% in the 4[th] quarter after influence of the pandemic weakened. The annual average was 62.8%.

TPCA forecasted that the economic recovery in USA and Europe and the demand for terminal application driven by 5G in 2021 will help to bring about growth of total production value for Taiwan manufacturers at home and abroad by 4%, which will then be record high again.

Prismark forecasted global PCB production value at USD 65.2 billion in 2020 of which HDI accounted for about USD990 million or 15% of the total. Global production value in 2021 could reach USD70.9 billion or at the growth rate of 8.6%.

Association of upstream, midstream and downstream industries

PCB is the fundamental component for computer, information, communication, consumer electrics, industrial control board, and medical devices and the design, quality and performance of which affect the reliability and market competitiveness of electronic products in market. The structure of its upstream, midstream and downstream industries is shown below:

==> picture [469 x 429] intentionally omitted <==

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

Brominated Glass Roving
Film
Epoxy Resin Cloth
Upstream
Film
Substrate Material Double-side PCB FPC
Etching liquid Plating Soldermask Dry film PCB production
Chemicals equipment
Midstream Single Sided Double Sided Multilayer Rigid-Flex Soft Plate
Board Board PCB PCB
Downstream
Phenolic resin Paper Insulating Copper Foil Bis-phenol A Epichlorohydrin Glass Roving Polyimide Polyester resin
Equipment Peripheral Computer and Telecommunications Products Industrial Electronics Consumer Instruments Precision Industry Aerospace Industry Defense
----- End of picture text -----

Source: ITRI, Materials Research Laboratories

3. Competition and development trend of the industry

In the wake of the development of 5G, AIoT, and HPC technologies worldwide, HDI design of PCB applies much wider scope further to portable and wearables market, and a large proportion advanced to high-end HDI, HDI FPCB, and Substrate-like PCB and SLP.

The prevalence of 5G triggered the rise of IoV that the automotive industry continues its trend in the development of electric car and smart car, which in turn drove up the proportion of electronic parts for vehicles. As such, the design for ADAS, Lidar, vehicle-mounted lens with the use of HDI PCB, or high frequency PCB continue to upgrade.

In the development of the diversified application in the design of HDI PCB, low-end HDI is already in the red sea market. To the contrast, HDI and HDI FPCB, and substrate-like PCB market still has high entrance barrier such as quality, capital and management. Currently, it is still the game of the bigger is getting bigger.

(III) Technology and R&D

Expenditures on R&D in the previous period to the day this report was printed

gy and R&D res on R&D in the previous period to the day this report was printed	gy and R&D res on R&D in the previous period to the day this report was printed	gy and R&D res on R&D in the previous period to the day this report was printed
Unit: NT$thousand
Item	2020	2021/3/31
R&D expense	76,590	14,349
Revenue	13,051,947	3,076,818
R&D expense inproportion to revenue(%)	0.59%	0.47%

2. Technologies or products successfully developed in the previous period to the day this report was printed.

Year	Product name	Note to the result of development
2020	1. Automotive safety control PCB development 2. Low loss PCB development 3. SLP PCB development	1. Differentiation in niche market 2. More diversity to product 3. Improve product gross profit
2021/3/31	1. Development of consumer PCB 2. Launch of Hybrid ADAS PCB to mass production 3. Photovoltaic PCB application (5G related)	1. Differentiation in niche market 2. More diversity to product 3. Strengthen the competitiveness of products

(IV) Long and short-term business development plan
Short-term business development plan
(1) Development of new market and new customers for HDI.
(2) Development of High Frequency PCB business.
(3) Development of HDI Rigid-Flex Board business.
(4) Development of Substrate-Like PCB (SLP) business.
Long-term business development plan
(1) Development of High-speed transmission special purpose PCB business.
(2) Development of Vehicle-mounted special purpose PCB business
(3) Development of slim embedded PCB business.

II. Market, production and sale

(I) Market Analysis
Regions of sale for main items

	Unit: NT$thousand;%	Unit: NT$thousand;%	Unit: NT$thousand;%
Region	Year	2020
		Sale amount	%
Export	America	3,071,389	23.53%
	Southeast Asia	1,048,712	8.03%
	Mainland China	5,221,788	40.01%
	Others	3,018,632	23.13%
	Subtotal	12,360,521	94.70%
Domestic sale		691,426	5.30%
Total		13,051,947	100.00%

2. Market Share

Unitech has been concentrated at the R&D and manufacturing of HDI PCB technology, and even further concentrated at the development of high-end HDI, and HDI FPCB technologies in the last few years. Unitech has about 4% of the share of the HDI PCB market with Microvia technology worldwide.

3. Supply and demand in market in the future and growth

Prismark forecasted that the production value of HDI PCB worldwide was about USD990 million in 2020, and will increase to USD1,370 million by 2025 with annual compound growth rate at 6.7%.

According to TrendForce, a survey research firm, the shipment volume of smart phone in 2020 will declined to about 1,250 million pieces in 2020 due to the US-China trade dispute and the global outbreak of COVID-19 at annual decline rate of 11%. This decline was the worst in many years. In 2021, the global smart phone

industry is expected to rebound if the pandemic is kept under control. The shipment volume is projected at 1,360 million pieces or at the annual growth rate of 8.8%.

The shipment volume of 5G smart phone in 2020 was about 240 million pieces at the penetration rate of about 19%. It is projected that the shipment volume of 5G smart phone worldwide will increase to about 500 million pieces in 2021 with penetration rate moved up to 37%.

In 2020, shipment volume of notebook computers exceeded 200 million pieces for the first time under the sudden massive growth of remote working and teaching for the prevention of further spreading of the pandemic. The annual growth rate of 22.5% was unprecedented. It is projected that the shipment volume of notebook computers in 2021 will increase to 217 million pieces at the growth rate of 8.6%.

According to Gartner, a survey research firm, the total spending of wearables at the user end will amount to USD81.5 billion in 2021 or at the growth rate of 18.1% from USD69 billion in the same period of 2020. The value will amount to USD93.86 billion in 2022.

4. Competitive Edge

(1) An outstanding management team

The management team has more than 30 years of experience in working as a team in concerted effort, and is specialized in enhancing production efficiency, improvement of process, upgrade of product quality and yield rate, and reducing cost, and will continue to development new products for further enrichment of its capacity.

(2) Technology innovation over time:

Observation of the changes in the industrial environment, assessment of its core capacity of the organization, meeting the needs of the customers, and conduct technology innovation over time. The Company continues to introduce economic production process, develop new products, and assure its advantage in competition. (3) High quality production technology:

The Company spares no effort to cut down the cost of production, upgrade output efficiency, maintain sound quality, and bolster competitive power.

(4) International marketing capacity:

The products were sold worldwide. The Company is on good terms with many world-renowned big firms, and will continue to bolster international marketing and service capacity for assurance of customer satisfaction.

Factors favorable and unfavorable for development in the future, and the responding policy:
(1) Favorable factors
- A. Enlargement of the scope of applications for HDI, and FPCB (such as wearable smart devices, smart cars, smart voice assistant, Bluetooth headset, Notebook computer, and LEO satellites).
- B. Upgrade the technology level of HDI (e.g.: level 3, level 4, free layer of HDI, HDI FPCB, free layer of HDI FPCB) with high entrance barrier.
- C. The stable management team is good for the competition in the industry.
(2) Unfavorable factors
- A. Keen competitive price

Response:

(a) Continue to develop high-end HDI, HDI FPCB, free layer HDI FPCB and SLP.
(b) Develop new market and new customers.
(c) Upgrade the capacity of cost control.
B. The rise of supply chain in Mainland China.

Response:

(a) Improve the process capacity of high-end HDI for better yield rate.
(b) Intensify the economy of scale.
(c) Strengthening of management capacity.
C. Changes in the market caused by the US-China trade dispute.

Response:

Develop new market and new customers.

D. The influence of COVID-19 on the demand and supply in market

Response:

  - (a) Reduce the cost of production and operating expense.

  - (b) Develop new market and new customers.

E. Rise of material prices triggered price surge in copper foil and base board. (a) Reduce the cost of production and operating expense.
(b) Reflect to cost to the customers for raising the sale price.

(II)Primary function of main items and production process

Primary function of main items

Classification of main items	Primary function
Double-side PCB	Automotive electronics, computer peripherals, consumer electronics
Multi-layer PCB	Network communication, automotive electronics, consumer electronics, industrial electronics,computer andperipherals.

2. Production process

==> picture [470 x 498] intentionally omitted <==

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

SOLDER RESIST
COPPER FLASH
CUT MATERIAL COATING
DRY FILM LASER DRILL
IMMERSION
GOLD
ETCHING ELECTROLESS
PLATING
MARKING
A.O.I
MICRO VIA
PLATING
ROUTING
BROWN OXIDE
DRY FILM
LAMINATE O/S TEST
DRILLING PATTERN PLATING QA
ELECTROLESS ETCHING
PACKING
PLATING
63
----- End of picture text -----

(III) The supply of key materials

The key materials used by the Company are base board, FCCL, copper foil, Prepreg, solder resist coating and dry film. All the suppliers are long-term business partners in good credit standing. The risk of shortage in supply is unlikely. Instead, supply of materials is abundant.

(IV)Name of the supplier/customer accounting for more than 10% of the total purchase (sale) in any of the last 2 years, the amount and the ratio to the total 1. List of major suppliers:

Information on major suppliers in the last 2 years

Unit: NT$ thousand

									Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand
	2019				2020				2020 to the last quarter
Item	Name	Amount	Proportion to net purchase of the year (%)	Relation with the issuer	Name	Amount	Proportion to net purchase of the year (%)	Relation with the issuer	Name	Amount	Proportion to net purchase in current period to the previous quarter (%)	Relation with the issuer
1	UNITECH ELECTRONICS INTERNATIONAL LIMITED	1,650,238	17	Subsidiary	Shanghai Unitech Electronics(Nantong) Co.,Ltd.	1,454,498	20,	Subsidiary	Shanghai Unitech Electronics(Nantong) Co.,Ltd.	645,825	35	Subsidiary
2	D	1,152,817	12	None	D	816,565	11	None	D	285,402	16	None
3	Others	6,821,626	71	--	Others	4,941,836	69	--	Others	909,516	49	--
4	Net purchase	9,624,681	100	--	Net purchase	7,212,899	100	--	Net purchase	1,840,743	100	--

Note 1: List the names of suppliers with more than 10% of the total purchases in the most recent two years and their purchase amounts and proportions. However, the name of the supplier or the transaction partner cannot be disclosed because of the contractual agreement, and the transaction object is an individual and non-related person.

Note 2: The above net purchases are all expressed by the company as a single entity.

2. List of major sale:

Information on major customers of sale in the last 2 years

2. List of major sale: Information on major customers of sale in the last 2 years	2. List of major sale: Information on major customers of sale in the last 2 years	2. List of major sale: Information on major customers of sale in the last 2 years	2. List of major sale: Information on major customers of sale in the last 2 years	2. List of major sale: Information on major customers of sale in the last 2 years	2. List of major sale: Information on major customers of sale in the last 2 years	2. List of major sale: Information on major customers of sale in the last 2 years	2. List of major sale: Information on major customers of sale in the last 2 years	2. List of major sale: Information on major customers of sale in the last 2 years	2. List of major sale: Information on major customers of sale in the last 2 years	2. List of major sale: Information on major customers of sale in the last 2 years	2. List of major sale: Information on major customers of sale in the last 2 years	2. List of major sale: Information on major customers of sale in the last 2 years
Unit: NT$thousand
	2019				2020				2021 to the lastquarter.
Item	Name	Amount	Proportion to the net sale of the year (%)	Relation with the issuer	Name	Amount	Proportion to the net sale of the year (%)	Relation with the issuer	Name	Amount	Proportion to net sale of current period to the last quarter(%)	Relation with the issuer
1	G	12,050,574	60	None	G	6,548,475	50	None	G	1,243,847	40	None
2	F	4,420,146	22	None	F	3,475,093	27	None	F	1,037,891	34	None
3	Others	3,577,201	18	--	Others	3,028,379	23	--	Others	795,079	26	--
4	Net sale	20,047,921	100	--		13,051,947	100	--		3,076,817	100	--

Note 1: List the names of customers with more than 10% of the total sales in the last two years and their sales amounts and proportions, but because the contract stipulates that the customer name or the transaction object is an individual and is not a related person, it can be coded.

Note 2: The above net sales are all expressed by the company as a single entity.

(V) Table of production value and volume in the last 2 years:

Unit: Square feet; $1,000

V) Table of production	value and volume in the last 2 years:	value and volume in the last 2 years:	value and volume in the last 2 years:	Unit: Square feet; $1,000	Unit: Square feet; $1,000	Unit: Square feet; $1,000
Year Main items	2019			2020
	Production capacity	Production volume	Production value	Production capacity	Production volume	Production value
Double-side PCB	300,000	63,861	41,042	300,000	52,511	47,304
Multi-layer PCB	6,000,000	4,748,050	11,940,829	6,000,000	4,104,809	10,344,752
Total	6,300,000	4,811,911	11,981,871	6,300,000	4,157,319	10,392,056

Note 1: The production volume excludes the production volume from outsourcing. In 2019 and 2020, the volume from outsourcing was 7,863,946 square fee and 5,902,691 square feet, respectively.

Note 2: The production values excludes the production values from outsourcing. In 2019 and 2020, the value of outsourcing amounted to $ 3,985,065 thousand and $2,978,508 thousand, respectively.

(VI) Sale value and volume in the last 2 years:

	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand
Year Main items	2019				2020
	Domestic sale		Export		Domestic sale		Export
	Volume	Value	Volume	Value	Volume	Value	Volume	Value
Double-side PCB	6,536	5,325	692,002	255,436	19,595	17,616	610,978	201,183
4-layer PCB	52,086	44,547	4,265,222	2,222,866	158,802	210,222	3,189,666	1,425,696
6-layer PCB	59,728	67,839	2,652,889	2,761,985	116,763	130,567	2,064,319	2,357,399
8-layer PCB	110,696	206,018	1,673,941	2,635,566	76,048	151,061	1,189,013	1,347,780
10-layer + PCB	14,308	52,973	3,004,469	11,795,367	14,568	54,181	2,687,919	7,044,480
Others	0	0	0	0	0	111,763	0	0
Total	243,355	376,702	12,288,523	19,671,220	385,775	675,410	9,741,896	12,376,537

Note 1: Sale volume includes the volume from outsourcing. Note 2: Sale value includes the value of outsourcing

III.The number of employees, the average years of service seniority, average age, and education levels of the employees in the last 2 years to the day this report was printed:

	Unit: Person；Year	Unit: Person；Year	Unit: Person；Year	Unit: Person；Year
	Year	2019	2020	2020 to April 30
Number of employees	Direct labor	4,065	4,193	3,813
	Indirect labor	1,228	1,028	1,186
	Total	5,293	5,401	4,999
	Average age	37.74	35.25	35.59
Average	years of service seniority	6.66	6.70	7.37
Education of l	PhD	0	0%	0%
	Master	3.16%	3.15%	3.22%
	College	44.55%	42.71%	45.21%
	Senior high school	33.93%	32.46%	33.69%
empoyees	Below Senior high school	18.36%	21.68%	17.88%

IV. Information on spending on environmental protection:

(I) Loss caused by pollution to the environment in the last 2 years to the day this report was printed (including compensation and violation of the laws governing environmental protection detected by inspection, specify the date of punishment, the reference number of penalty document, the provisions of violation, the content of the law in violation, and the content of penalty), disclosed the estimated amount of possible loss at present and in the future, and the policy in response to the situations:

Date of punishment: No violation and related punishment in 2020 to 2021.04.30.

(II) Pollution at present and corrective action taken, the effect on the earnings, competitive position and expected significant capital expenditures on environmental protection in 2 years ahead:

			Unit: NT$1,000
	2011	2012	2013
Improvement work for anti-pollution equipment	48,085	52,894	58,183
Expense incurred from maintenance and repair	5,105	5,258	5,416
of anti-pollution equipment
Expense incurred from water treatment plant of	6,605	6,737	6,872
the industrial park for sewage pipe service
Declaration of tests in environmental protection	5,078	5,180	5,284
and improvement
Fees for handling solid wastes	93,424	102,766	113,043
Fees charged for prevention and treatment of pollution (soil and groundwater, air pollution).	4,105	4,516	4,967

V. Labor Management Relation

(I) Benefit policy, continuing education and training, and retirement system of the employees, and labor-management agreement and other policies for the protection of the rights and privileges of the employees

1. Employee benefit policy:

The Company values “the respect of humanity and concern for the employees” as a vital aspect of its corporate philosophy, and hopes all employees can have the peace of mind in working through the proper care of all employees and their families in physical and psychological health. In addition, the employees of the Company have organized the Employee Welfare Committee charged with the planning and implementation of benefits for the employees. The benefits for the employees for the time being are specified as follows:

A. The year-end bonus is equivalent to at least 2 months of salary in average (depending on the performance evaluation).
B. Annual salary increment in commensurate with performance.
C. Subscription of treasury shares and employee dividend.
D. Labor, health and group insurance.
E. Subsidy for local and overseas tourist trips for the employees.
F. Annual fee health examination
G. Gifts or gift vouchers for the 3 major traditional festivals and birthday.
H. After-work recreational activities for the employees

I. Matrimonial, bereavement subsidy and gift for celebration events, scholarship and education grant for children of employees.

J. Free uniform
K. Employee cafeteria (with vegetarian food served)
L. Internal and external training, and subsidy for continuing education.
M. Employee aid program
N. Nursery care allowance
Employee training and continuing education system:

In the global market where acute competition is the order of the day, talents are critical for the Company in maintaining its advantage in development. This is indeed the very notion of Unitech for long time thereby it commits ample resources to train and develop the kind of skilled people the Company needs, and maps out a perfect training system and related lectures for the employees on the basis of the specific nature of the industry. The training covers the skills for managerial staff at different levels of management, in-house PCB professional training, work skills, project management, languages, and self-motivation. Employees are also encouraged to participate in the lectures and seminars organized by external institutions for the advocacy of life-time learning. The purpose is to improve the quality of people with proper knowledge and skills, and the strengthening of their capacity in responding to the changes in the operation environment so that the Company could maintain its leadership position in the PCB industry with profit growth. The resources committed to training and education cannot yield financial result in a fortnight, but we firmly believe that the continued investment in the training of human resources will help to lay down a solid foundation for the development and survival in the future. The detail of external training for the employees is specified as follows:

Internal training in 2020

Unit: NTD

			Unit: NT
Trainer System	Participant by head count	Total hours of training	Total expense
Administrative system	63	363	2,138,656
Production technologysystem	3,413	23,130
Production support system	254	1,460
Quality assurance and customer service system	807	5,065

External training in 2020 Unit: NTD

Trainer System	Participant by head count	Total hours of training	Total expense
Administrative system	20	166	30,684
Production technologysystem	60	652	164,240
Production support system	30	329	98,560
Quality assurance and customer service system	11	102	35,220

＊ Production system: President Office, Planning Office, Audit Office, Legal Affairs Office, Safety and Health Office, Administration Bushiness Unit, Finance and Accounting Business Unit.
＊ Production technology system: Technology Business Unit, Process Engineering Business Unit, Product Engineering Business Unit, Product Business Unit, Production Business Unit.
＊ Production support system: Production Control Business Unit, Marketing Business Unit, Purchasing Business Unit, Product Engineering Business Unit, Environment Maintenance Business Unit, Information Business Unit.
＊ Quality assurance and customer service system: Quality Assurance Business Unit
＊ Total expense, including: fees for internal and external tutors and teaching materials.
Retirement system and implementation:

The Company instituted its regulations governing the retirement of employees in accordance with the Labor Standard Act and other applicable legal rules, and appropriate funds to the “Pension Reserve” deposited at the special account of the Trust Department at the Bank of Taiwan monthly. The labor and the management jointly established the “Pension Reserve Supervisory Committee” responsible for the supervision and review the pension reserve and related matters. This arrangement helps to assure the right of the employees in receiving pension after retirement and for decent way of life.

As of the end of 2020, the payable pension contribution of Unitech was appropriated (debited) at NT$212,723 thousand in book. The actual transfer to the Trust Department of the Bank of Taiwan, the Employee Pension Reserve Supervisory Committee amounting to NT$446,035 thousand.

The new retirement system became effective as of 2005.07.01. The employees of the Company are discreet in choosing either the old system or the new system for retirement. The Company has appropriated pension fund for those who chose the new system and employees employed after the new system is in effect on a monthly basis so that these employees are entitled to a legitimate and perfect system for retirement where both the employees and the Company are the winners.

Policy for the protection of the rights and privileges of the employees:

For the full-range concern of the employees for the timely care of employees and the offering of counseling service

or referral, the Company will follow up with employees who need special care and provide necessary assistance. For the better understanding of each functional units in management and human resources utilization, the Company organizes meetings with employees on a selective basis at regular intervals for their opinions.

For hearing the voices of the majority of the employees, a special hoteline and the President e-mail have been arranged in the plant. In addition, physical mail boxes were also installed at different plant sites to make sure the channels for the feedback of employees are through. The Company hopes to dig out the problems voluntarily through the mechanisms of interviews and communication channels with routine review of the management policies for assuring further room for improvement and create a positive and joyous work environment for the employees.

Work environment and safety protection policy:
The Company promises to take safety, quality, and production as equally important for the operation of the Company, and will spare no effort in using the resources and power to create a safe, healthy and comfortable work environment to achieve the goal of zero accident and hazard. Reduce occupational hazards for assurance of the rooting of the idea of occupational safety among all employees as an integral part of the corporate culture. The Company was accredited with the OHSAS 18001 and conversion to ISO 45001 in occupational safety management system, and will continue to realize the spirit of continued improvement under PDCA in order to translate the policy of related occupational safety and health into actions.
A. An aptitude test and propensity survey will be conduct on each new employees before reporting to duties, and health examination will also be arranged at a later date.
B. Inspection on the environment will be conducted every year at regular intervals for the control of hazards.
C. All new equipment and production process will be subject to physical, chemical, biological and human factor assessment for detecting possible hazards before the employees are permitted to proceed with the equipment and process in the operation.
D. Adequate safety gear will be provided depending on the type of hazards at the work environment with proper supervision in wearing the gears.
E. First-aid kits, emergency recuse personnel and equipment are in place (such as eye rinsing devices, sprays for corrosion injury).
Labor-Management Meeting:

Routine Labor-Management Meeting for both sides to exchange opinions and communication for problem solving through mutual consultation under the principle of good faith.

(II) The loss inflicted to the Company in the previous period to the day this report was printed (including the violation of the Labor Standard Act detected in inspections, and specify the date of punishment, the reference number of the penalty document, the provisions of the law violated, and the content of punishment), and the estimated amount of fine at present and in the future, and the policy for response:
Loss due to labor-management disputes:

Date of punishment:	Reference number of the penalty document	The provisions of law violated	Content of violation	Amount of fine
2019/03/13	Xin-Bei-Fu-Lao-Jian Zi No. 1084248670	Paragraph 2 under Article 32 of the Labor Standard Act	The extended hours of work exceeds the mandatoryrequirement	900,000
2019/11/25	Xin-Bei-Fu-Lao-Jian Zi No. 10842845991	Paragraph 1 under Article 36 of the Labor Standard Act	One day of regular holiday has not been offered for every7 days of work.	360,000
2019/11/25	Xin-Bei-Fu-Lao-Jian Zi No. 1084284599	Paragraph 2 under Article 32 of the Labor Standard Act	The extended hours of work exceeds the mandatoryrequirement	900,000
2020/08/10	Xin-Bei-Fu-Lao-Jian Zi No. 1094787240	Article 24 of the Labor Standard Act	No additional payment for overtime duties as required.	96,000
2020/08/10	Xin-Bei-Fu-Lao-Jian Zi No. 10947872401	Paragraph 1 under Article 36 of the Labor Standard Act	One day of regular holiday has not been offered for every7 days of work.	420,000
2020/12/23	Fu-Lao-Zi Zi No. 1090198430	Paragraph 2 under Article 32 of the Labor Standard Act	Extended work hours exceed the upper limit of 46 hours.	50,000
2020/12/23	Fu-Lao-Zi Zi No. 1090198430	Paragraph 1 under Article 36 of the Labor Standard Act	At lease one day of regular holiday has not been offered for every7 days of work.	50,000
2021/03/04	Xin-Bei-Fu-Lao-Jian Zi No. 1104716058	Article 24 of the Labor Standard Act	No additional payment for overtime duties as required.	144,000
2021/03/04	Xin-Bei-Fu-Lao-Jian Zi No. 11047160581	Paragraph 2 under Article 32 of the Labor Standard Act	The extended hours of work exceeds the mandatoryrequirement	600,000

Under the corporate culture of creativity, work family, customer oriented, and integrity, the Company makes and pursues its policies centered around its employees. As such, labor-management relation is harmonious. It would be difficult to estimate the loss deriving from labor-management dispute, if applicable.
The Company will respond in the following manner for the time being and in the future:
A. The Company duly observe applicable legal rules governing labor and act accordingly.

B. The Company makes further effort to provide benefits for the employees.

C. The Company continues to engage in labor-management communication in transparency and sincerity, and keep the channels for complaints through and respond to the problems of the employees in positive attitude.

VI. Major contracts:

Nature of the contracts	Parties concerned	Term of the contracts	Principal content	Restrictive clause
Lease agreement on lands	IDB, Ministry of Economic Affairs	2008/05/21~2028/05/20	Leasing of 5 lots of lands totaled 67,537.40㎡located at Dingliao Section 622 in Zeli Industrial Zone, Yilan County.	Pledge of certificate of deposits amounted to NT$19,006 thousand as security deposit.
Lease agreement on lands	IDB, Ministry of Economic Affairs	2007/06/27~2027/06/26	Leasing of 12 lots of lands totaled 52,405.61㎡located at Ligong Section 186-54~65 of Zeli Industrial Zone, Yilan County.	Pledge of certificate of deposits amounted to NT$9,855 thousand as security deposit.
Lease agreement on lands	IDB, Ministry of Economic Affairs	2007/10/17~2027/10/16	Leasing of 1 lot of land totaled 4,108.26㎡at No. 186-66, Ligong Section, Zelin Industrial Zone, Yilan County.	Pledge of certificate of deposits amounted to NT$828 thousand as security deposit.
Syndicated loan agreement with consortium	With Bank of Taiwan and the Arranger and the consortium of banks	2010/03/31~2025/03/31	Mid-term secured loan amounted to NT$3,800,000,000. Borrower: Unitech Printed Circuit Board Corp.	1. Keeping the financial ration to required limit. 2. Cash flow limit.
Syndicated loan agreement with consortium	With Bank of Taiwan as the Arranger and the consortium of banks	2019/9/26~2022/9/26	Mid-term secured loan amounted to USD24,000,000. Borrower: Shanghai Unitech Electronics Co., Ltd.	1. Keeping the financial ration to required limit.

Six. Financial Outlook

I. Condensed Balance Sheet, Comprehensive Income Statement, the Independent Auditors of the statements and Audit Opinions over the last 5 years:

(I) Condensed Balance Sheet and Comprehensive Income Statement

Condensed Balance Sheet (Separate)

Unit: NT$ thousand

		Condensed Balance Sheet (Separate) Unit: NT$thousand	Condensed Balance Sheet (Separate) Unit: NT$thousand	Condensed Balance Sheet (Separate) Unit: NT$thousand	Condensed Balance Sheet (Separate) Unit: NT$thousand	Condensed Balance Sheet (Separate) Unit: NT$thousand
Year Item		Financial information over the last 5 years (Note 1)					Financial information in current period to 2021.03.31 (Note 3)
		2016	2017	2018	2019	2020
Current assets		5,133,288	7,263,367	6,447,781	7,345,702	5,920,026	not applicable
Property, plant and equipment(Note 2)		8,603,510	9,554,966	9,579,500	9,076,124	8,119,298	not applicable
Intangible assets		0	0	37,787	36,371	108,442	not applicable
Other assets(Note 2)		4,653,089	4,273,638	4,326,134	5,014,579	4,894,986	not applicable
Total assets		18,389,887	21,091,971	20,391,202	21,472,776	19,042,752	not applicable
Current liabilities	Cum-dividend	5,387,160	6,301,767	5,775,028	6,399,760	5,102,053	not applicable
	Ex-dividend	---	6,483,945	6,022,792	6,895,286	5,102,053	not applicable
Non-current liabilities		4,769,314	5,304,374	4,742,599	3,757,810	4,268,899	not applicable
Total liabilities	Cum-dividend	10,156,474	11,606,141	10,517,627	10,157,570	9,370,952	not applicable
	Ex-dividend	---	11,788,319	10,765,390	10,653,096	9,370,952	not applicable
Equity attributable to the shareholders of parent company		8,233,413	9,485,830	9,873,575	11,315,206	9,671,800	not applicable
Capital stock		5,559,654	6,009,991	6,194,072	6,194,072	6,194,072	not applicable
Capital surplus		3,126,341	2,800,948	2,822,047	2,831,974	2,843,140	not applicable
Retained earnings	Cum-dividend	(316,736)	674,107	1,014,477	2,471,030	545,332	not applicable
	Ex-dividend	---	370,476	766,714	1,975,504	545,332	not applicable
Other equity		19,230	784	(157,021)	(181,870)	89,256	not applicable
Treasuryshares		(155,076)	0	0	0	0	not applicable
Total equity	Cum-dividend	8,233,413	9,485,830	9,873,575	11,315,206	9,671,800	not applicable
	Ex-dividend	---	9,303,652	9,625,812	10,819,680	9,671,800	not applicable

＊If the company prepares individual financial reports, it should prepare a condensed balance sheet and comprehensive income statement for the individual for the most recent five years.
＊If the financial data using International Financial Reporting Standards is less than 5 years old, the following table should be prepared separately (2) Financial data using my country's Financial Accounting Standards.
Note 1: The year for which the visa has not been checked by an accountant should be indicated.
Note 2: If an asset revaluation has been performed in the current year, the date of the revaluation and the amount of revaluation added should be listed.
Note 3: As of the date of publication of the annual report, companies that are listed or whose stocks have been traded in the business premises of a securities firm have the latest financial information verified by an accountant or checked by an accountant, and should be disclosed.
Note 4: The above-mentioned post-distribution figures should be filled out according to the resolution of the shareholders' meeting in the following year.
Note 5: If the financial information is notified by the competent authority that it should be corrected or re-edited, it should be listed with the corrected or re-edited figure, and the circumstances and reasons should be indicated.

Condensed Balance Sheet (consolidated)

Unit: NT$ thousand

		Condensed Balance Sheet (consolidated)	Condensed Balance Sheet (consolidated)	Condensed Balance Sheet (consolidated)	Condensed Balance Sheet (consolidated)	Condensed Balance Sheet (consolidated)	Unit: NT$thousan
Year Item		Financial information over the last 5 years (Note 1)					Financial information in current period to 2021.03.31 (Note 3).
		2016	2017	2018	2019	2020
Current assets		6,652,197	8,619,584	8,353,142	9,270,511	7,663,415	8,326,222
Property, plant and equipment(Note 2)		10,747,425	11,875,965	12,094,749	12,904,244	13,277,793	13,511,777
Intangible assets		0	0	37,787	36,371	108,442	106,207
Other assets(Note 2)		2,439,286	1,943,170	1,760,878	2,802,084	2,784,647	2,487,587
Total assets		19,838,908	22,438,719	22,246,556	25,013,210	23,834,297	24,431,793
Current liabilities	Cum-dividend	6,089,233	7,320,560	7,461,565	7,809,964	7,760,319	6,859,539
	Ex-dividend	---	7,502,738	7,709,328	8,305,490	7,760,319	6,859,539
Non-current liabilities		5,453,127	5,590,206	4,886,047	5,867,594	6,402,178	6,693,279
Total liabilities	Cum-dividend	11,542,360	12,910,766	12,347,612	13,677,558	14,162,497	13,552,818
	Ex-dividend	---	13,092,944	12,595,375	14,173,084	14,162,497	13,552,818
Equity attributable to the shareholders of parent company		8,233,413	9,485,830	9,873,575	11,315,206	9,671,800	10,878,975
Capital stock		5,559,654	6,009,991	6,194,072	6,194,072	6,194,072	6,194,072
Capital surplus		3,126,341	2,800,948	2,822,047	2,831,974	2,843,140	2,831,884
Retained earnings	Cum-dividend	(316,736)	674,107	1,014,477	2,471,030	545,332	1,718,792
	Ex-dividend	---	370,476	766,714	1,975,504	545,332	1,718,792
Other equity		19,230	784	(157,021)	(181,870)	89,256	134,227
Treasuryshares		(155,076)	0	0	0	0	0
Uncontrolled Equity		63,135	42,123	25,369	20,446	0	0
Total equity	Cum-dividend	8,296,548	9,527,953	9,898,944	11,335,652	9,671,800	10,878,975
	Ex-dividend	---	9,345,775	9,951,181	10,840,126	9,671,800	10,878,975

＊If the company prepares individual financial reports, it should prepare a condensed balance sheet and comprehensive income statement for the individual for the most recent five years.
＊If the financial data using International Financial Reporting Standards is less than 5 years old, the following table should be prepared separately (2) Financial data using my country's Financial Accounting Standards.

Note 1: The year for which the visa has not been checked by an accountant should be indicated.

Note 2: If an asset revaluation has been performed in the current year, the date of the revaluation and the amount of revaluation added should be listed.
Note 3: As of the date of publication of the annual report, companies that are listed or whose stocks have been traded in the business premises of a securities firm have the latest financial information verified by an accountant or checked by an accountant, and should be disclosed.
Note 4: The above-mentioned post-distribution figures should be filled out according to the resolution of the shareholders' meeting in the following year.
Note 5: If the financial information is notified by the competent authority that it should be corrected or re-edited, it should be listed with the corrected or re-edited figure, and the circumstances and reasons should be indicated.

Condensed Comprehensive Income Statement (Separate)

Unit: NT$ thousand

	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand
Year Item	Financial information over the last 5 years (Note 1)					Financial information in current period to 2021.03.31 (Note 2).
	2016	2017	2018	2019	2020
Revenue	10,104,870	15,452,234	17,387,132	20,047,921	13,051,947	not applicable
Grossprofit	366,306	2,423,132	2,119,495	4,278,527	(55,168)	not applicable
Operatingincome	(741,503)	1,106,539	708,495	2,251,798	(1,372,149)	not applicable
Non-operating income and expense	(110,130)	(422,282)	13,322	(45,455)	(198,811)	not applicable
Earnings before taxation	(851,633)	684,257	721,817	2,206,343	(1,570,960)	not applicable
Net income from continued operations	(698,750)	674,107	656,651	1,735,300	(1,436,452)	not applicable
Loss from discontinued operations	0	0	0	0	0	not applicable
Net income (loss) in currentperiod	(698,750)	674,107	656,651	1,735,300	(1,436,452)	not applicable
Other comprehensive income in current period (net amount after taxation)	(277,750)	(18,446)	(141,352)	(38,650)	253,946	not applicable
Total comprehensive income in currentperiod	(976,500)	655,661	515,299	1,696,650	(1,182,506)	not applicable
Earningsper share	(1.27)	1.24	1.06	2.80	(2.32)	not applicable

＊If the company prepares individual financial reports, it should prepare a condensed balance sheet and comprehensive income statement for the individual for the most recent five years.
＊If the financial data using International Financial Reporting Standards is less than 5 years old, the following table should be prepared separately (2) Financial data using my country's Financial Accounting Standards.
Note 1: The year for which the visa has not been checked by an accountant should be indicated.
2: As of the date of the publication of the annual report, companies that are listed or whose stocks have been traded in the business premises of a securities firm have the latest financial information that has been verified by an accountant or reviewed by the accountant, and they should be disclosed.
3: The loss of a suspended business unit is presented as the net amount after deducting income tax.
4: Financial information should be corrected or re-edited by the competent authority, and the corrected or re-edited figures shall be listed, and the circumstances and reasons shall be indicated.

Condensed Income Statement (Consolidated)

Unit: NT$ thousand

	Condensed Income Statement (Consolidated)	Condensed Income Statement (Consolidated)	Condensed Income Statement (Consolidated)	Condensed Income Statement (Consolidated)	Condensed Income Statement (Consolidated)	Unit: NT$thousand
Year Item	Financial information over the last 5 years (Note 1)					Financial information in current period to 2021.03.31 (Note 2).
	2016	2017	2018	2019	2020
Revenue	12,649,827	18,131,323	19,539,609	22,418,326	14,386,972	3,411,592
Grossprofit	918,373	2,879,257	2,707,764	5,050,970	(3,528)	83,985
Operatingincome	(617,296)	1,098,590	811,573	2,429,229	(2,310,138)	(395,287)
Non-operating income and expense	(219,104)	(417,696)	(80,298)	(153,044)	727,011	2,026,489
Earnings before taxation	(836,400)	680,894	731,275	2,276,185	(1,583,127)	1,631,202
Net income from continued operations	(715,680)	651,647	639,123	1,731,087	(1,435,460)	1,171,179
Loss from discontinued operations	0	0	0	0	0	0
Net income (loss) in currentperiod	(715,680)	651,647	639,123	1,731,087	(1,435,460)	1,171,179
Other comprehensive income in current period (net amount after taxation)	(276,519)	(19,895)	(140,578)	(39,360)	253,946	46,059
Total comprehensive income in currentperiod	(992,199)	631,752	498,545	1,691,727	(1,181,514)	1,217,238
Net income attributable to shareholders of parent company	(698,750)	674,107	656,651	1,735,300	(1,436,452)	1,171,179
Net income attributable to uncontrolled equity	(16,930)	(22,460)	(17,528)	(4,213)	992	0
Total comprehensive income attributable to shareholders of parent company	(976,500)	655,661	515,299	1,696,650	(1,182,506)	1,217,238
Total comprehensive income attributable to uncontrolled equity	(15,699)	(23,909)	(16,754)	(4,923)	992	0
Earningsper share	(1.27)	1.24	1.06	2.80	(2.32)	1.89

＊If the company prepares individual financial reports, it should prepare a condensed balance sheet and comprehensive income statement for the individual for the most recent five years.
＊If the financial data using International Financial Reporting Standards is less than 5 years old, the following table should be prepared separately (2) Financial data using my country's Financial Accounting Standards.
Note 1: The year for which the visa has not been checked by an accountant should be indicated.
2: As of the date of the publication of the annual report, companies that are listed or whose stocks have been traded in the business premises of a securities firm have the latest financial information that has been verified by an accountant or reviewed by the accountant, and they should be disclosed.
3: The loss of a suspended business unit is presented as the net amount after deducting income tax.
4: Financial information should be corrected or re-edited by the competent authority, and the corrected or re-edited figures shall be listed, and the circumstances and reasons shall be indicated.

(II) Name of CPA and audit opinions:

CPA and opinion/year	Independent Auditors	Audit Opinion
2015	KPMG Taiwan Lin Heng-Sheng, CPA; Chen Pei-Chi, CPA	Revised unqualified opinion
2016	KPMG Taiwan Wang Ching-Sung, CPA; Chen Pei-Chi, CPA	Unqualified opinion
2017	KPMG Taiwan Wang Ching-Sung, CPA; Chen Pei-Chi, CPA	Unqualified opinion
2018	KPMG Taiwan Chuang Wei-Chun, CPA; Wang Ching-Sung, CPA	Unqualified opinion
2019	KPMG Taiwan Chuang Wei-Chun, CPA; Wang Ching-Sung, CPA	Unqualified opinion
2020	KPMG Taiwan Chuang Wei-Chun, CPA; Wang Ching-Sung, CPA	Unqualified opinion

II. Financial analysis of the last 5 years:

Financial analysis (separate)

Year (Note 1) Items of analysis(Note 3)	Year (Note 1) Items of analysis(Note 3)	Financial analysis of the last 5years	Financial analysis of the last 5years	Financial analysis of the last 5years	Financial analysis of the last 5years	Financial analysis of the last 5years
		2016	2017	2018	2019	2020
Financial structure	Liabilities to assets ratio(%)	55.23	55.03	51.58	47.30	49.21%
	Long-term capital to property, plant and equipment ratio(%)	151.13	154.79	152.58	166.07	171.70%
Ability to repay debt	Current ratio(%)	95.29	115.26	111.65	114.78	116.03%
	Quick ratio(%)	75.83	86.48	80.75	84.73	86.12%
	Debt service coverage ratio (times)	(11.44)	7.29	7.58	21.35	(18.33)
Utility	Account receivable turnover (times)	2.99	3.72	3.85	4.54	3.20
	Average days of cash collection	123	99	95	81	115
	Inventoryturnover(times)	10.79	9.51	8.85	8.86	7.93
	Account payable turnover (times)	6.91	6.23	6.33	7.24	5.99
	Average days ofgoods sold	34	39	42	42	47
	Property, plant and equipment turnover(time)	1.23	1.70	1.82	2.15	1.52
	Total assets turnover(times)	0.57	0.78	0.84	0.96	0.64
Profitability	Return on assets(%)	(3.60)	3.87	3.59	8.70	(6.77)
	Return on equity (%)	(7.78)	7.61	6.78	16.38	(13.69)
	EBT to paid-in capital ratio (%) (Note 7)	(15.32)	11.39	11.65	35.62	(25.36)
	Netprofit rate(%)	(6.91)	4.36	3.78	8.66	(11.01)
	Earningsper share(NTD)	(1.27)	1.24	1.06	2.80	(2.32)
Cash flow	Cash flow ratio(%)	1.78	17.11	34.24	49.15	29.92
	Cash flow adequacy ration (%)	46.63	55.18	55.73	76.55	86.30
	Cash reinvestment ratio(%)	(1.31)	4.30	6.91	11.19	3.96
Leverage	Operation leverage	1	1	1	1	1
	Financial leverage	0.92	1.11	1.18	1.05	0.94
Explain the reasons for the changes in the financial ratios in the last 2 years. (Note applicable if the change is under 20%) 1. Debt service coverage ratio fell by 185.85% from the previous period mainly due to EBT turned from black to red ink. 2. Account receivable turnover rate fell by 29.52%from the previous period mainly due to the decrease of revenue. 3. Average days of cash collection increased by 41.98% from the previous period mainly due to the decrease of net sale to the extent that account receivable turnover fell. 4. Property, plant and equipment turnover rate fell by 29.30% from the previous period mainly due to the decrease of revenue. 5. Total assets turnover rate fell by 33.33% from the previous period mainly due to the decrease of revenue. 6. Return on assets fell by 177.82% from the previous period mainly due to net income turned from black ink to red ink. 7. Return on equity fell by 183.58% from the previous period mainly due to net income turned from black ink to red ink. 8. EBT to paid-in capital ratio fell by 171.20% from the previous period mainly due to net income turned from black ink to red ink. 9. Net profit rate was down by 227.14% from the previous period mainly due to net income turned from black ink to red ink. 10. Earnings per share fell by 182.86% from the previous period mainly due to net income turned from black ink to red ink. 11. Cash flow ratio was down by 39.13% from the previous period mainly due to the decrease of net cash flow from operation. 12. Cash reinvestment ratio was down by 64.61% from the previous period mainly due to the decrease of net cash flow from operation and the increase in thepayment of cash dividend.

Financial analysis (consolidated)

Year (Note 1) Items of analysis(Note 3)	Year (Note 1) Items of analysis(Note 3)	Financial analysis of the last 5years	Financial analysis of the last 5years	Financial analysis of the last 5years	Financial analysis of the last 5years	Financial analysis of the last 5years	Current period to 2021.03.31 (Note 2)
		2016	2017	2018	2019	2020
Financial structure	Liabilities to assets ratio(%)	58.18	57.54	55.5	54.68	59.42	55.47
	Long-term capital to property, plant and equipment ratio(%)	127.93	127.30	122.24	133.31	121.06	130.05
Ability to repay debt	Current ratio(%)	109.25	117.74	111.95	118.70	98.75	121.38
	Quick ratio(%)	85.94	87.51	81.62	87.82	71.82	86.95
	Debt service coverage ratio (times)	(7.46)	5.71	5.84	16.36	(11.54)	65.38
Utility	Account receivable turnover (times)	2.86	3.68	3.79	4.44	3.11	3.74
	Average days of cash collection	128	100	97	83	117.37	98
	Inventoryturnover(times)	9.63	8.81	7.88	7.83	6.79	6.38
	Account payable turnover (times)	5.53	5.33	5.13	5.68	4.72	4.67
	Average days ofgoods sold	38	42	47	47	53.78	58
	Property, plant and equipment turnover(time)	1.20	1.60	1.63	1.79	1.10	1.02
	Total assets turnover(times)	0.65	0.86	0.87	0.95	0.59	0.57
Profitability	Return on assets(%)	(3.15)	3.76	3.48	7.85	(5.47)	4.94
	Return on equity (%)	(7.72)	7.56	6.76	16.34	(13.68)	11.40
	EBT to paid-in capital ratio (%) (Note 7)	(15.04)	11.33	11.81	36.75	(25.56)	26.33
	Netprofit rate(%)	(5.66)	3.59	3.27	7.72	(9.98)	34.33
	Earningsper share(NTD)	(1.27)	1.24	1.06	2.80	(2.32)	1.89
Cash flow	Cash flow ratio(%)	5.88	21.07	35.53	54.19	10.04	17.31
	Cash flow adequacyratio(%)	60.29	64.62	65.21	73.25	69.86	--
	Cash reinvestment ratio(%)	(0.12)	5.28	8.21	12.58	1.01	3.96
Leverage	Operation leverage	1.00	1.00	1.00	1.00	1.00	1.00
	Financial leverage	0.88	1.15	1.23	1.06	0.95	0.94
Explain the reasons for the changes in the financial ratios in the last 2 years. (Note applicable if the change is under 20%) 1.Debt service coverage ratio fell by 170.54% from the previous period mainly due to EBT turned from black ink to red ink. 2. Account receivable turnover rate fell by 29.95% from the previous period mainly due to the decrease of revenue. 3. Average days of cash collection increased by 41.41% from the previous period mainly due to the decrease of net sale to the extent that account receivable turnover fell. 4. Property, plant and equipment turnover rate fell by 38.55% from the previous period mainly due to the decrease of revenue. 5. Total assets turnover rate fell by 37.89% from the previous period mainly due to the decrease of revenue. 6. Return on assets fell by 169.68% from the previous period mainly due to net income turned from black ink to red ink. 7. Return on equity fell by 183.72% from the previous period mainly due to net income turned from black ink to red ink. 8. EBT to paid-in capital ratio fell by 169.55% from the previous period mainly due to net income turned from black ink to red ink. 9. Net profit rate was down by 229.27% from the previous period mainly due to net income turned from black ink to red ink 10. Earnings per share fell by 182.86% from the previous period mainly due to net income turned from black ink to red ink. 11.Cash flow ratio was down by 81.47% from the previous period mainly due to: the decrease of net cash flow from operation. 12. Cash reinvestment ratio was down by 91.97% from the previous period mainly due to the decrease of net cash flow from operation and the increase in thepayment of cash dividend.

III. Audi Committee Review Report on Financial Statements of the previous period:

Audit Committee Review Report

For approval

The Board of Directors of the Company have prepared the financial statements of 2020 (including the consolidated financial statements), which have been audited by KPMG Taiwan, and were forwarded together with the Business Report to the Audit Committee for review. These statements were appropriately prepared. Pursuant to Article 219 of the Securities and Exchange Act, we hereby declared in this Review Report for your approval.

To

2021 General Meeting of Shareholders, Unitech Printed Circuit Board Corp.

Unitech Printed Circuit Board Corp. Convener of Audit Committee: Hsu Wen-Hsing

2021.03.30

Audit Committee Review Report

For approval

The Board of Directors of the Company prepared the proposal for covering loss carried forward to 2020. The Audit Committee has review the proposal, which was appropriately prepared. Pursuant to Article 219 of the Securities and Exchange Act, we hereby declared in this Review Report for your approval.

2021 General Meeting of Shareholders, Unitech Printed Circuit Board Corp.

Unitech Printed Circuit Board Corp. Convener of Audit Committee: Hsu Wen-Hsing

2021.03.30

IV. Financial Statements of the previous period with Auditors’ Report:

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.

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 Uncertainty- Impairment Assessment on non-financial Assets”, and note 6 (h), (i) and (j) “Description of ” Estimation of impairment of non-financial assets .

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:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4-3

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of 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.

(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)

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 -	December 31, 2020	December 31, 2020	December 31, 2020
	Amount	%	Amount
	7,760,319 32 7,809,964 31
7,663,415 32	5,605,779 24 4,026,744 16 176,350 1 285,983 1 407,326 2 457,680 2 212,723 1 308,925 1 - - 788,262 3
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 -
	6,402,178 28 5,867,594 23
	14,162,497 60 13,677,558 54
	6,194,072 26 6,194,072 25
	2,843,140 12 2,831,974 11
	306,606 1 133,076 1 174,327 1 157,021 1 64,399 - 2,180,933 9
16,170,882 68
	545,332 2 2,471,030 11
	41,694 - (37,583) - 232,996 1 53,103 - (182,812) (1) (189,847) (1) (2,622) - (7,543) -
	89,256 - (181,870) (1)
	9,671,800 40 11,315,206 46
	- - 20,446 -
	9,671,800 40 11,335,652 46
$ 23,834,297 100	$ 23,834,297 100 25,013,210 100

Total assets $ 23,834,297 100 25,013,210 100

See accompanying notes to consolidated financial statements. 85

(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)

2020	% 100 100	% 100 100	2019	% 100 77
Amount 14,386,972 14,390,500			Amount 22,418,326 17,367,356
(3,528)	-		5,050,970	23
2,180,450 127,918 (1,758)	15 1 -		2,561,365 64,840 (4,464)	12 - -
2,306,610	16		2,621,741	12
(2,310,138)	(16)		2,429,229	11
5,841 1,531,447 (618,863) (126,202) (65,212)	- 11 (4) (1) -		11,017 193,748 (191,455) (148,227) (18,127)	- 1 (1) (1) -
727,011	6		(153,044)	(1)
(1,583,127) (147,667)	(10) (1)		2,276,185 545,098	10 2
(1,435,460)	(9)		1,731,087	8
7,499 182,380	- 1		(60,556) 135,502	- 1
189,879	1		74,946	1
64,067	-		(114,306)	(1)
64,067	-		(114,306)	(1)
253,946	1		(39,360)	-
$ (1,181,514)	(8)		1,691,727	8
$ (1,436,452) 992	(9) -		1,735,300 (4,213)	8 -
$ (1,435,460)	(9)		1,731,087	8
$ (1,182,506) 992	(8) -		1,696,650 (4,923)	8 -
$ (1,181,514)	(8)		1,691,727	8
$	(2.32)			2.80
		$		2.80

See accompanying notes to consolidated financial statements. 86

(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)

			Equityattributable to owners ofparent	Equityattributable to owners ofparent	Equityattributable to owners ofparent	Equityattributable to owners ofparent
Ordinary shares	Capital surplus		Retained earnings			Total other	equityinterest		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 2,822,047 67,411 -
- - - - - - - -				1,735,300 - - - - 1,735,300 (4,213) 1,731,087 - (114,132) 135,502 (60,020) - (38,650) (710) (39,360)
- - - -				1,735,300 (114,132) 135,502 (60,020) - 1,696,650 (4,923) 1,691,727
- - 65,665 - (65,665) - - - - - - - - - - 157,021 (157,021) - - - - - - - - - - - (247,763) - - - - (247,763) - (247,763) - 9,927 - - (26,093) - - - 8,910 (7,256) - (7,256) - - - - (4,891) - 4,891 - - - - -
6,194,072 2,831,974 133,076 157,021 2,180,933 (37,584) 53,104 (189,847) (7,543) 11,315,206 20,446 11,335,652 - - - - (1,436,452) - - - - (1,436,452) 992 (1,435,460) - - - - - 64,067 182,380 7,499 - 253,946 - 253,946
- - - - (1,436,452) 64,067 182,380 7,499 - (1,182,506) 992 (1,181,514)
- - 173,530 - (173,530) - - - - - - - - - - 17,306 (17,306) - - - - - - - - - - - (495,526) - - - - (495,526) - (495,526) - 717 - - - 15,211 - (464) - 15,464 (21,438) (5,974) - 10,449 - - 3,792 - - - 4,921 19,162 - 19,162 - - - - 2,488 - (2,488) - - - - -
$ 6,194,072 2,843,140 306,606 174,327 64,399 41,694 232,996 (182,812) (2,622) 9,671,800 - 9,671,800

See accompanying notes to consolidated financial statements. 87

(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	2019 2,276,185 1,690,154 13,792 (4,464) 148,227 (11,017) (6,574) 18,127 59,211 - - -
	2,197,957	1,907,456
	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)	(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
	389,833	259,447
	2,587,790	2,166,903

See accompanying notes to consolidated financial statements .88

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	2020 1,004,663 5,942 9,826 (203,488) (37,499)	2019 4,443,088 11,020 36,412 (147,374) (111,010)
	779,444	4,232,136
	(564,274) 564,677 - 29,488 (54,189) (1,585,503) 28,125 (3,834) (84,143) - 6,531	- - (180,241) 15,593 - (3,228,125) 126,613 (4,682) (2,890) 34,788 (43,585)
	(1,663,122)	(3,282,529)
	12,021,617 (12,481,031) 69,991 7,112,984 (5,394,987) (76,501) (495,526)	15,511,140 (15,612,652) - 4,203,876 (4,560,369) (103,947) (247,763)
	756,547	(809,715)
	(44,355)	49,830
	(171,486) 1,236,698	189,722 1,046,976
	$ 1,065,212	1,236,698

See accompanying notes to consolidated financial statements. 89

(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

90 (Continued)

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

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		Effective date per
Interpretations	Content of amendment	IASB
Amendments to IAS 1	The amendments aim to promote consistency	January 1, 2023
“Classification of Liabilities as	in applying the requirements by helping
Current or Non-current”	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.
Amendments to IAS 1	The key amendments to IAS 1 include:	January 1, 2023
“Disclosure of Accounting Policies”	●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.
Amendments to IAS 8	The amendments introduce a new definition	January 1, 2023
“Definition of Accounting	for accounting estimates: clarifying that they
Estimates”	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.

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)

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.

92 (Continued)

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 non-controlling 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	Shareholding	Note
			December 31, 2020	December 31, 2019
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)

Unitech Printed Circuit Board Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

Name of investor	Name of subsidiary	Principal activity	Shareholding	Shareholding	Note
			December 31, 2020	December 31, 2019
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% 100.00% 100.00%	- - - - - Note2 Note2 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)

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)

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)

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)

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)

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 ‘credit-impaired’ 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)

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.

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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.

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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

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102

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

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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.

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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.

105

(Continued)

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.

106

(Continued)

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)

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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.

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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.

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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:

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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

nation of significant accounts Cash and cash equivalents
Cash in stock Demand deposits Time deposits	December 31, 2020 $ 1,919 1,063,293 -	December 31, 2019 2,023 846,318 388,357
	$ 1,065,212	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	December 31, 2019 380,753 101,321
	$ 609,040	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.

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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	December 31, 2019 7,669 5,264,146 35,008
	$ 4,008,657	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:

	December 31, 2020	Loss allowance provision 3,426 2,337 1,432 2,486 2,603
Gross carrying amount $ 3,868,133 141,835 4,953 3,417 2,603	Weighted-average loss rate
	0.09% 1.65% 28.91% 72.75% 100.00%
$ 4,020,941		12,284

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112

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

	December 31, 2019	Loss allowance provision 3,572 2,099 2,209 5,973 21,155
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%
		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

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	December 31, 2019 303,892 5,073
	$ 428,160	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	December 31, 2019 239,613 1,210,557 521,946 310,128
	$ 1,957,815	2,282,244

(Continued)

113

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:

Associates	December 31, 2020	December 31, 2019 1,018,374
	$ 995,638

(i) Associates

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

Carrying amount of individually insignificant associates’equity	December 31, 2020	December 31, 2019 1,018,374
	$ 995,638

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	2019 (18,127) 7,950
	$ (41,898)	(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)

114

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
Note and trade receivables (Includes related parties)
Inventories
Other current assets
Non-current financial assets at fair value through other comprehensive
income
Property, plant and equipment
Deferred tax assets
Other non-current assets
Short-term borrowings
Note and Trade payables (Includes related parties)
Other current liabilities
Long-term borrowings
Deferred tax liabilities
Net defined benefit liabilities—non-current
Other non-current liabilities
Carrying amount of net assets

$ 73,132
45,171
22,882
10,878
5,985
63,358
61,662
8,423
(36,000)
(47,452)
(14,786)
(11,391)
(114,466)
(17,312)
(30)

$
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:

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

115

(Continued)

Unitech Printed Circuit Board Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

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

116

(Continued)

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:

Land $ 632,728 - - 3,003	Buildings and constructions 160,738 2,482 (170) -	Office facilities 7,181 11,758 (3,039) -	Transportation facilities 36,214 5,130 (1,571) -	Other assets 18,981 3,154 (838) -	Total 855,842 22,524 (5,618) 3,003
$ 635,731	163,050	15,900	39,773	21,297	875,751
$ - 436,015 5,072 - 143,939 50,804 (3,102)	- 154,357 6,381 - - - -	- 7,107 74 - - - -	- 33,755 2,459 - - - -	- 1,942 12,145 (236) 5,130 - -	- 633,176 26,131 (236) 149,069 50,804 (3,102)
$ 632,728	160,738	7,181	36,214	18,981	855,842
$ 54,712 53,741 - 183	36,006 37,759 - -	4,056 3,393 (3,039) -	11,735 11,448 (1,014) -	3,333 5,985 (838) -	109,842 112,326 (4,891) 183
$ 108,636	73,765	4,410	22,169	8,480	217,460
$ - 54,955 (243)	- 36,006 -	- 4,056 -	- 11,735 -	- 3,333 -	- 110,085 (243)
$ 54,712	36,006	4,056	11,735	3,333	109,842

(Continued)

117

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	Buildings and constructions 89,285	Office facilities 11,490	Transportation facilities 17,604	Other assets 12,817	Total 658,291 746,000 -
	$ 578,016	124,732	3,125	24,479	15,648
	$ -	-	-	-	-

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)

118

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	2019 -
	$ 10,745	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

December 31, 2020 Guarantee or acceptance institution Range of interest rates (%) Commercial paper payable The Shanghai Commercial & Savings Bank, LTD. 0.92% Less: Prepaid interest Total As the year of December 31, 2019: None.	December 31, 2020	December 31, 2020	Amount $ 70,000 (9) $ 69,991
	Guarantee or acceptance institution	Range of interest rates (%)
		0.92%

(l) Short-term borrowings

The short-term borrowings were summarized as follows:

December 31, 2020 $ 12,631 907,315 50	December 31, 2020 $ 12,631 907,315 50	December 31, 2019 17,499 1,003,011 428,177
$ 919,996		1,448,687
$ 4,156,007		3,229,610
	0.46%~4.65%	0.85%~4.65%

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

(Continued)

119

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

(m) Long-term borrowings

The details were as follows:

	December 31, 2020	December 31, 2020	Amount $ 375,000 598,080 2,137,253 3,792,000 142,400
Currency	Rate	Maturity year
TWD USD CNY TWD USD	1.35%~1.68% 1.32% 4.99% 1.10%~1.79% 0.74%	111~112 111 113 111~114 111
			7,044,733 (1,438,954)
			$ 5,605,779
			$ 2,361,638

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		Amount $ 780,000 865,086 359,760 3,320,391
	Currency	Rate	Maturity year
	TWD CNY USD TWD	1.45%~2.04% 4.95%~5.00% 3.10%~3.11% 1.50%~2.60%	111 111 111 111~115
				5,325,237 (1,298,493)
				$ 4,026,744
				$ 2,053,914

(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)

120

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)

121

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)

122

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)

123

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)

124

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

Way to repayment:
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.
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:

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	December 31, 2019 97,444
	$ 407,326	457,680

The amounts recognized in profit or loss was as follows:

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

125

(Continued)

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

(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)	December 31, 2019 730,504 (421,579)
	212,723 -	308,925 -
	$ 212,723	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.

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(Continued)

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)	2019 661,184 - 24,357 70,781 (25,818)
	$ 658,758	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)	2019 404,406 - 6,550 11,554 23,342 (24,273)
	$ 446,035	421,579

(Continued)

127

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 -	2019 13,046 5,266 (846)
	$ 18,869	17,466
	2020 $ 4,900 13,969	2019 5,042 12,424
	$ 18,869	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 1.25% 0.75%	December 31, 2019
		0.75%~1.75% 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)

128

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:

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)
	Increased0.25％ (17,580) 18,124 (18,413) 22,219

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)

129

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		2019 383,570 7,438
$ - 7,806
7,806		391,008
(155,473)		154,090
$ (147,667)		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
$ (316,625) (30,065) (1,858) - 7,806 (70,357) 244,137 - 1,795 17,500
$ (147,667)

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

(Continued)

130

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	December 31, 2019 76,695 -
	$ 322,627	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:

Land revalue added rovaluation	Loss carryforward $ 59,343 160,000 (59,343)	Others 18,113 (343) (2,319)	Total
			$ 77,456 159,657 (61,662)
	$ 160,000	15,451	$ 175,451
	$ 209,649 (150,306)	21,897 (3,784)	$ 231,546 (154,090)
	$ 59,343	18,113	$ 77,456
	investment subsidiary net income 114,466 - (114,466)	Other	Total
$ 171,517 - -		- 4,833 -	$ 285,983 4,833 (114,466)
$ 171,517		4,833	$ 176,350
$ 171,517	114,466	-	$ 285,983

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

(Continued)

131

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)

	(in thousand of shares)	(in thousand of shares)
Balance on January 1 Balance on December 31	Ordinary shares 2020 2019 619,407 619,407
	2020 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	December 31, 2019 2,675,703 156,101 170 -
	$ 2,843,140	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)

132

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)

133

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	2019 Amount per share Total amount $ 0.80 495,526	2018 Amount per share Total amount 0.40 247,763	2018 Amount per share Total amount 0.40 247,763
	Amount per share		Amount per share
	$ 0.80		0.40

(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	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income 53,104 - 143,525 38,014 841 - - - - (2,488) - -	Remeasurement of defined benefits plan (189,847) - - - - 6,514 943 42 - - - (464)	Unearned employee compensation (7,543) - - - - - - - 4,921 - - -	Non-contro lling 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)
	$ 41,694	232,996	(182,812)	(2,622)	-	89,256

(Continued)

134

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) - - - - - - - - - -	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income (87,289) - - 112,373 22,460 669 - - - - 4,891 -	Remeasurement of defined benefits plan (129,827) - - - - - (58,352) (1,628) (40) - - -	Unearned employee compensation (16,453) - - - - - - - - 8,910 - -	Non-controlli ng interests 25,369 (174) - - - - - (536) - - - (4,213)	Total (131,652) (114,306) - 112,373 22,460 669 (58,352) (2,164) (40) 8,910 4,891 (4,213)
	$ (37,584)	53,104	(189,847)	(7,543)	20,446	(161,424)

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(Continued)

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:

2020 $ (1,436,452)	2020 $ (1,436,452)	2019 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

(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	Total 248,025 1,892,399 3,011,574 1,893,771 7,225,776 115,427
	Electronics department $ 248,025 1,892,399 3,011,574 1,893,771 7,225,776 111,763	Others - - - - - 3,664
	$ 14,383,308	3,664	14,386,972

136

(Continued)

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	Total 322,760 2,713,142 3,532,538 3,334,624 12,205,970 309,292
	Electronics department $ 322,760 2,713,142 3,532,538 3,334,624 12,205,970 -	Others - - - - - 309,292
	$ 22,109,034	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	2019 11,017 -
	$ 5,841	11,017

(Continued)

137

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	2019 18,785 18,913 112,238 37,238 6,574
	$ 1,531,447	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)

138

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)	2019 (104,772) - - (59,211) (11,616) (7,261) (8,595)
	$ (618,863)	(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	2019 (145,902) (834) (11,173) 9,682
	$ (126,202)	(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)

139

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	Contractual cash flows	Within 12 months	1-5years	Over 5 years
	925,945 69,991 3,037,371 997,369 546,092 1,466,041 6,187,245	925,945 69,991 3,037,371 997,369 107,676 1,466,041 152,116	- - - - 335,743 - 6,035,129	- - - - 102,673 - -
$ 12,576,248	13,230,054	6,756,509	6,370,872	102,673
$ 1,448,687 1,856 3,054,768 805,238 555,124 1,298,493 4,026,744	1,459,137 1,856 3,054,768 805,238 592,679 1,310,917 4,289,897	1,459,137 1,856 3,054,768 805,238 105,195 1,310,917 105,765	- - - - 328,850 - 4,173,813	- - - - 158,634 - 10,319
$ 11,190,910	11,514,492	6,842,876	4,502,663	168,953

(Continued)

140

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:

F		December 31, 2020			December 31, 2019
	Foreign currency	Exchange rate	TWD	Foreign currency	Exchange rate	TWD
	$ 175,077 4,447 1,278 53,310 $ 118,320 264 79,471 24,894	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	4,986,180 155,730 353 233,338 3,369,765 9,262 21,958 108,960	201,579 5,021 14,242 1 52,301 68,876 264 505,584 24,445	USD/TWD= 29.98 EUR/TWD= 33.59 JPY/TWD= 0.28 GBP/TWD= 39.96 CNY/TWD= 4.31 USD/TWD= 29.98 EUR/TWD= 33.59 JPY/TWD= 0.28 CNY/TWD= 4.31	6,043,346 168,659 3,931 22 225,158 2,064,911 8,859 139,541 105,235
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)

141

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, 2019 Net income Other comprehensive income after tax Net income - 4,821 -
	2020	Net income -
	Other comprehensive income after tax $ 6,090		Other comprehensive income after tax 4,821
	$ (6,090)	-	(4,821)	-

(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)

142

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

	December 31, 2020	December 31, 2020	December 31, 2020	Total 609,040
Book Value $ 609,040		Fair value
	Level 1 513,704	Level 2 -	Level 3 95,336
1,065,212 5,922 4,002,735 1,869 571	- - - - -	- - - - -	- - - - -	- - - - -
5,076,309	-	-	-	-
$ 5,685,349	513,704	-	95,336	609,040
$ 7,964,729 69,991 3,037,371 997,369 506,788	- - - - -	- - - - -	- - - - -	- - - - -
12,576,248	-	-	-	-
$ 12,576,248	-	-	-	-
	December 31, 2019			Total 482,074
Book Value $ 482,074		Fair value
	Level 1 380,753	Level 2 -	Level 3 101,321
1,236,698 7,662 5,229,145 5,073 765	- - - - -	- - - - -	- - - - -	- - - - -
6,479,343	-	-	-	-
$ 6,961,417	380,753	-	101,321	482,074

(Continued)

143

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

	December 31, 2019	December 31, 2019	December 31, 2019
Book Value $ 6,773,924 1,856 3,054,768 805,238 555,124		Fair value
	Level 1 - - - - -	Level 2 - - - - -	Level 3 - - - - -	Total - - - - -
11,190,910	-	-	-	-
$ 11,190,910	-	-	-	-

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)

144

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

Quantified information of significant unobservable inputs was as follows:

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

(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.

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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.

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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)	December 31, 2020 $ 14,162,497 (1,065,212)	December 31, 2019 13,677,558 (1,236,698)
	$ 13,097,285		12,440,860
	$ 9,671,800		11,335,652
	135.42%		109.75%

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147

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 Education Foundation family 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 Association Ppseawa Taiwan R.O.C. family 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	Account		2020				2019
		Number of shares -	Repose	Acquisition price $ -	Acquisition price	Number of shares 34,000	Repose
Ideal Bike Corporation	Financial fair value through other comprehensive income-non-current						Ordinary shares of Ideal Bike corporation

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148

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:

		2020
The highest amount	Ending balance -	Rate	Interest expense	Interest payable
$ -		- 2019	-	-

The highest amount		Rate	Interest expense	Interest payable
		-	-	-

(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	2019 162,386
$ 67,081

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149

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	December 31, 2019 386,541 2,105,356 139,621 3,574,272 48,000 56,260 169,259
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
		$ 5,950,803	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	December 31, 2019 710
	$ 96,540	422,127
	$ 264	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.

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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 right-of-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	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.

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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 theperiod	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	Relationshi p 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	Endingbalance	Endingbalance	Endingbalance	Endingbalance	Highest Percentage of ownership (%)
				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	- %

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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	BeginningBalance	BeginningBalance	Purchases(Note3)	Purchases(Note3)	Sales(Note3)	Sales(Note3)	Sales(Note3)	Sales(Note3)	EndingBalance	EndingBalance
					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	Relatedparty	Nature of relationship		Transaction details	Transaction details		Transactions w from	ith terms different others	Notes/Accounts receivable (payable)	Notes/Accounts receivable (payable)	Note
			Purchase/ Sale	Amount	Percentage of total purchases/sales	Payment terms	Unitprice	Payment terms	Endingbalance	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

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Unitech Printed Circuit Board Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

Relatedparty	Nature of relationship		Trans	action details		Transactions w from	ith terms different others	Notes/Accounts receivable (payable)	Notes/Accounts receivable (payable)	Note
		Purchase/ Sale	Amount	Percentage of total purchases/sales	Payment terms	Unitprice	Payment terms	Endingbalance	Percentage of total notes/accounts receivable (payable)
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
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 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 (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 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
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	Counter-party	Nature of relationship	Ending balance	Turnover rate	Overdue	Amounts received in Action taken subsequentperiod	Amounts received in Action taken subsequentperiod	Allowance for bad debts	Note
					Amount	Action taken
Shanghai Unitech Electronics (Nantong)Co.,Ltd.	The 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)		Intercompanytransactions	Intercompanytransactions	Intercompanytransactions
				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%

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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)			Intercompanytransactions
				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 glassproducts	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.

155

(Continued)

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%

156

(Continued)

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:

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

(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	2019 3,774,592 11,345,988 2,020,420 5,277,326
	$ 14,386,972	22,418,326

157

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	2019
		5,486,026 3,004,704 1,268,866 2,012,471 779,289
	$ 7,255,519	12,551,356

158

V. The audited Separate Financial Statements of the previous period:

Independent Auditors ’ Report

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

Opinion

We have audited the financial statements of Unitech Printed Circuit Board Corporation(“the Company”), which comprise the balance sheets as of December 31, 2020 and 2019, the statements of comprehensive income, changes in equity and cash flows for the years then ended and notes to the 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 financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our 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 Financial Statements section of our report. We are independent of the Company 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 financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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 Uncertainty- Impairment Assessment on non-financial Assets”, and note 6 (h), (i) and (j) “Description of ” Estimation of impairment of non-financial assets .

159

3-1

Description of key audit matter:

The Company’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 (g) “Summary of Accounting Policies- Inventories”, note 5 (a) “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:

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 Company 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 Company’s investee companies were accounted for by using the equity method based on its ’ financial statements which were audited by other auditors. Our opinion, insofar as it relates to the Company s investee companies are based solely on the report of other auditors. As of December 31, 2020 and 2019, the total assets of investee companies which constituted 6.07% and 5.53% of the Company’s total assets, respectively. For the years ended December 31, 2020 and 2019, the profit or loss of subsidiaries and affiliated companies accounted for by using the equity method which constituted 4.13% and (0.85)% of the income which the Company recognized before income tax, respectively.

160

3-2

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

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

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

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

Auditors ’ Responsibilities for the Audit of the Financial Statements

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

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

161

3-3

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on this financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements 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 parent company only financial statements are intended only to present the 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 parent company only financial statements are those generally accepted and applied in the Republic of China.

The auditors’ report and the accompanying parent company only 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 parent company only financial statements, the Chinese version shall prevail.

162

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) Unitech Printed Circuit Board Corporation

Balance Sheets

December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollar)

		December 31, 2020	December 31, 2020	December 31, 2020	December 31, 2019	December 31, 2019			December 31, 2020	December 31, 2020	December 31, 2020	December 31, 2020		December 31, 2019	December 31, 2019
	Assets		Amount	%	Amount	%		Liabilities and Equity		Amount		%		Amount	%
	Current assets:							Current liabilities:
1100	Cash and cash equivalents (note 6(a))	$	737,633	4	721,920	3	2110	Short-term notes and bills payable (note 6(k))	$		69,991	-		-		4
1170	Accounts receivable, net (note 6(c))		3,586,864	19	4,578,646	22	2100	Short-term borrowings (note 6(l) and 8)			172,631		1	737,499	-
1180	Accounts receivable-related parties (note 7)		1,969	-	7	-	2170	Accounts payable		2,194,504		12		2,184,359	10
1200	Other receivables, net (note 6(d))		-	-	34,575	-	2180	Accounts payable-related parties (note 7)			849,074		4	399,134		2
1210	Other receivables-related parties, net (note 7)		571	-	12,409	-	2200	Other payables		1,006,623			5	1,379,228		6
1220	Current tax assets		391	-	-	-	2220	Other payables-related parties (note 7)			6,897	-		5,776	-
1310	Inventories (note 6(e))		1,454,912	8	1,850,399	9	2230	Current tax liabilities		-		-		331,555		2
1410	Prepayments		71,176	-	73,059	-	2280	Current Lease liabilities (note 6(n))			99,462		1	97,444	-
1476	Other financial assets-current (note 7 and 8)		52,170	-	52,498	-	2322	Current portion of long-term borrowings (note 6(m) and 8)			694,500		4	1,252,000		6
1479	Other current assets, others		14,340	-	22,189	-	2399	Other current liabilities			8,371	-		12,765	-
	Total current assets		5,920,026	31	7,345,702	34		Total current liabilities		5,102,053		27		6,399,760	30
	Non-current assets:							Non-Current liabilities:
1517	Financial assets at fair value through other comprehensive income						2540	Long-term borrowings (note 6(m) and 8)		3,472,500		18		2,837,000	13
	non-current (note 6(b))		467,567	2	324,042	2	2570	Deferred tax liabilities (note 6(p))			176,350		1	171,517		1
1550	Investments accounted for using equity method, net (note 6(f)(g))		3,638,739	19	3,965,036	19	2580	Non current lease liabilities (note 6(n))			407,326		2	457,680		2
1600	Property, plant and equipment (note 6(h) and 8)		8,119,298	43	9,076,124	42	2640	Net defined benefit liability, non-current (note 6(o))			212,723		1	291,613		1
1755	Right-of-use assets (note 6(i))		474,396	3	560,444	3		Total non-current liabilities		4,268,899		22		3,757,810	17
1780	Intangible assets (note 6(j))		108,442	1	36,371	-		Total liabilities		9,370,952		49		10,157,570	47
1840	Deferred tax assets (note 6(p))		160,000	1	7,495	-		Equity (note 6(q)):
1915	Prepayments for business facilities (note 9)		80,575	-	87,676	-	3110	Ordinary share		6,194,072		33		6,194,072	29
1920	Refundable deposits (note8 and 9)		61,612	-	58,448	-	3200	Capital surplus		2,843,140		15		2,831,974	13
1990	Other non-current assets, others (note 9)		12,097	-	11,438	-		Retained earnings:
	Total non-current assets		13,122,726	69	14,127,074	66	3310	Legal reserve			306,606		2	133,076		1
							3320	Special reserve			174,327		1	157,021		1
							3350	Unappropriated earnings			64,399	-		2,180,933	10
								Total retained earnings			545,332		3	2,471,030	12
								Other equity:
							3410	Exchange differences on translation of foreign financial statements			41,694	-		(37,584)	-
							3420	Unrealised gains (losses) from financial assets measured at fair value
								through other comprehensive income			232,996		1	53,104	-
							3491	Other equity, the unearned remuneration of employees			(2,622)	-		(7,543)	-
							3445	Gains (losses) on remeasurements of defined benefit		(182,812)		(1)		(189,847)	(1)
								Total other equity			89,256	-		(181,870)	(1)
								Total equity		9,671,800		51		11,315,206	53
	Total assets	$	19,042,752	100	21,472,776	100		Total liabilities and equity	$	19,042,752		100		21,472,776	100

Total assets $ 19,042,752 100 21,472,776 100

163

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) Unitech Printed Circuit Board Corporation

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)

2020		2019
Amount	%	Amount
(55,168) - 4,278,527 21
1,240,391 10 1,964,053 10 76,590 1 64,840 - - - (2,164) -
1,316,981 11 2,026,729 10
(1,372,149) (11) 2,251,798 11
4,468 - 8,463 - 403,273 3 57,455 - (104,518) (1) (134,572) (1) (81,284) (1) (108,429) (1) (420,750) (3) 131,628 1
(198,811) (2) (45,455) (1)
(1,570,960) (13) 2,206,343 10 (134,508) (1) 471,043 2
(1,436,452) (12) 1,735,300 8
7,499 - (60,020) - 182,380 1 135,502 1
189,879 1 75,482 1
64,067 - (114,132) (1)
64,067 - (114,132) (1)
253,946 1 (38,650) -
$ (1,182,506) (11) 1,696,650 8
$ (2.32) 2.80
		$ 2.80

See accompanying notes to parent company only financial statements. 164

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) Unitech Printed Circuit Board Corporation

Statements of Changes in Equity

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollar)

Ordinary shares		Retained earnings	Retained earnings		Total other	equityinterest
	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 2,822,047 67,411 -			947,066 76,548 (87,289) (129,827) (16,453) 9,873,575
- - - - - - - -			1,735,300 - - - - 1,735,300 - (114,132) 135,502 (60,020) - (38,650)
- - - -			1,735,300 (114,132) 135,502 (60,020) - 1,696,650
- - 65,665 - (65,665) - - - - - - - - 157,021 (157,021) - - - - - - - - - (247,763) - - - - (247,763) - 9,927 - - (26,093) - - - 8,910 (7,256) - - - - (4,891) - 4,891 - - -
6,194,072 2,831,974 133,076 157,021 2,180,933 (37,584) 53,104 (189,847) (7,543) 11,315,206 - - - - (1,436,452) - - - - (1,436,452) - - - - - 64,067 182,380 7,499 - 253,946
- - - - (1,436,452) 64,067 182,380 7,499 - (1,182,506)
- - 173,530 - (173,530) - - - - - - - - 17,306 (17,306) - - - - - - - - - (495,526) - - - - (495,526) - 717 - - - 15,211 - (464) - 15,464 - 10,449 - - 6,280 - - - 4,921 21,650 - - - - - - (2,488) - - (2,488)
$ 6,194,072 2,843,140 306,606 174,327 64,399 41,694 232,996 (182,812) (2,622) 9,671,800

165

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) Unitech Printed Circuit Board Corporation

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) associates accounted for using equity method Loss on disposal of property, plan and equipment Loss on disposal of subsidiaries Other items Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Accounts receivable Accounts receivable-related parties Other receivable Other receivable-related parties Inventories Prepayments Other current assets Other current financial assets-current Accounts payable Accounts payable-related parties 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
	1,926,608 1,426,153
	991,782 (322,491) (1,962) (7) 34,575 (2,345) 11,838 (11,745) 395,487 (141,189) 1,883 2,437 7,849 55,571 328 5,781 10,145 9,924 449,940 (142,670) (522,555) 202,734 1,121 2,677 (4,394) (3,432) (72,376) (5,926) - (2,895)
	1,303,661 (353,576)
	3,230,269 1,072,577

See accompanying notes to parent company only financial statements. 166

7-1

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) Unitech Printed Circuit Board Corporation

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 other comprehensive income Disposal of financial assets at fair value through other comprehensive income Acquisition of property, plant and equipment Disposal of property, plant and equipment Increase in refundable deposits Acquisition of intangible assets Disposal of subsidiaries 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 Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2020
	1,526,525 3,145,532
	- (170,000) - 15,593 (457,563) (917,775) 981 16,325 (3,164) (378) (84,143) (2,890) 18,943 - (2,603) 2,711
	(527,549) (1,056,414)
	5,677,861 7,605,658 (6,242,729) (7,469,804) 69,991 - 4,100,000 3,024,000 (4,022,000) (4,450,280) (70,860) (103,947) (495,526) (247,763)
	(983,263) (1,642,136)
	15,713 446,982 721,920 274,938
	$ 737,633 721,920

See accompanying notes to parent company only financial statements. 167

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) Unitech Printed Circuit Board Corporation

Notes to the 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 (“the Company”) are the design, manufacture and sale of PCB.

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

The Parent company financial statements was 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 Company has initially adopted the following new amendments, which do not have a significant impact on its 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 Company 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

168

(Continued)

Unitech Printed Circuit Board Corporation

Notes to the Financial Statements

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

Standards or		Effective date per
Interpretations	Content of amendment	IASB
Amendments to IAS 1	The amendments aim to promote consistency	January 1, 2023
“Classification of Liabilities as	in applying the requirements by helping
Current or Non-current”	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.
Amendments to IAS 1	The key amendments to IAS 1 include:	January 1, 2023
“Disclosure of Accounting Policies”	●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.
Amendments to IAS 8	The amendments introduce a new definition	January 1, 2023
“Definition of Accounting	for accounting estimates: clarifying that they
Estimates”	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.

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

169

(Continued)

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

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

(a) Statement of compliance

These 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”).

(b) Basis of preparation

(i) Basis of measurement

Except for the following significant accounts, the 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 Company entity is determined based on the primary economic environment in which the entity operates. The 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)

170

Unitech Printed Circuit Board Corporation

Notes to the Financial Statements

(i) Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Company 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.

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

qualifying cash flow hedges to the extent that the hedges are effective.

(ii) Foreign operations

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 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 Company 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.

(Continued)

171

Unitech Printed Circuit Board Corporation

Notes to the Financial Statements

(d) 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.

(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 Company 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.

(e) Cash and cash equivalents

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

(f) 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 Company 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.

(Continued)

172

Unitech Printed Circuit Board Corporation

Notes to the Financial Statements

(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 Company 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:

●

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.

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 Company 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.

(Continued)

173

Unitech Printed Circuit Board Corporation

Notes to the Financial Statements

Dividend income is recognized in profit or loss on the date on which the Company’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 Company 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.

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 Company 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 Company 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 Company 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 Company’s historical experience and informed credit assessment as well as forward-looking information.

(Continued)

174

Unitech Printed Circuit Board Corporation

Notes to the Financial Statements

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

The Company 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 Company 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 Company in accordance with the contract and the cash flows that the Company expects to receive). ECL are discounted at the effective interest rate of the financial asset.

At each reporting date, the Company assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ 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.

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Company 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 Company 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 Company’s procedures for recovery of amounts due.

175

(Continued)

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

6) Derecognition of financial assets

The Company 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 Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Company 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.

(ii) Financial liabilities and equity instruments

1) Classification of debt or equity

2) Equity instrument

3) Treasury shares

4) Financial liabilities

176

(Continued)

Unitech Printed Circuit Board Corporation

Notes to the Financial Statements

5) Derecognition of financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company 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.

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 Company 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.

(g) Inventories

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

(h) Investment in associates

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

The financial statements include the Company’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 Company, from the date on which significant influence commences until the date on which significant influence ceases. The Company ’ 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 Company and an associate are recognized only to the extent of unrelated Company’s interests in the associate.

(Continued)

177

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

When the Company’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 Company has incurred legal or constructive obligations or made payments on behalf of the associate.

(i) Investment in subsidiaries

When preparing the financial statements of Parent company, investment in subsidiaries which are controlled by the Company is accounted for using the equity method. Under the equity method, an investment in a subsidiary is initially recognized at cost and adjusted thereafter to recognize the Company's share of profit or loss and other comprehensive income of the subsidiary as well as the distribution received. The Company also recognized its share in the changes in the equity of subsidiaries.

Changes in a Parent's ownership interest in a subsidiary that do not result in the loss of control are accunted for within equity.

(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.

(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 Company.

(iii) Depreciation

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	15~55 years
2)	Machinery equipment	3~12 years
3)	Office equipment	3~5 years
4)	Other equipment	3-5 years

(Continued)

178

Unitech Printed Circuit Board Corporation

Notes to the Financial Statements

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 Company 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 Company 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

●

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 Company 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.

(Continued)

179

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

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 Company’s incremental borrowing rate. Generally, the Company 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 Company’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

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 to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company 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 Company 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 Company 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.

(Continued)

180

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

For sale-and-leaseback transactions, the Company 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 Company 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 Company recognizes only the amount of any gain or loss that relates to the rights transferred to the buyer-lessor. For leaseback transaction, the Company 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 Company continues to recognize the transferred asset and recognizes the financial liability equal to the transfer proceeds.

(iii) As a lessor

When the Company 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 Company 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 Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Company 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 Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

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

The Company 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 Company 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.

(Continued)

181

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

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 Company 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 Company and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

(ii) Subsequent expenditure

(iii) Amortization

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.

(m) Impairment of non-financial assets

At each reporting date, the Company 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.

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

(Continued)

182

Unitech Printed Circuit Board Corporation

Notes to the Financial Statements

(n) Revenue recognition

(i) Revenue from contracts with customers

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The Company 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 Company’ s main types of revenue are explained below.

– ● Sale of goods electronic components

The Company design, manufacture and sale PCB. The Company 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 Company has objective evidence that all criteria for acceptance have been satisfied.

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

● Financing components

The Company 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 Company recognizes as an asset the incremental costs of obtaining a contract with a customer if the Company expects to recover those costs. The incremental costs of obtaining a contract are those costs that the Company 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.

(Continued)

183

Unitech Printed Circuit Board Corporation

Notes to the Financial Statements

The Company 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 Company 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 Company

can specifically identify;

2) the costs generate or enhance resources of the Company 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 Company cannot distinguish whether the costs relate to unsatisfied performance obligations or to satisfied performance obligations(or partially satisfied performance obligations), the Company recognizes these costs as expenses when incurred.

(o) Government grants and government assistance

The Company 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 Company 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 Company’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.

(Continued)

184

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

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 Company, 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 Company 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 Company 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 Company 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.

(q) Income taxes

(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;

185

(Continued)

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(ii) Temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company 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 tax assets and liabilities are offset if the following criteria are met:

(i) the Company 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.

(r) Earnings per share

The Company 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

The Company discloses the operating segment information in the consolidated financial statement. Therefore, the Company does not disclose the operating segment information in the parent-comapny-only financial statements.

186

(Continued)

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

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

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

(a) Valuation of inventories

(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 Company 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.

(Continued)

187

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(6) Explanation of significant accounts

(a) Cash and cash equivalents

nation of significant accounts Cash and cash equivalents
Cash in stock Demand deposits Time deposits	December 31, 2020
	$ 737,633 721,920

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 Company.

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

Unlisted common shares	December 31, 2020

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

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

There was no disposals of strategic investments and transfers of any cumulative gain or loss within equity relating to these investments as of December 31, 2020.

During 2019, the Company 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 Company realized a loss of $4,891 thousand, which was recognized as other comprehensive income, and thereafter, was reclassified 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 Company had not been pledged as collateral for its borrowings.

(Continued)

188

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

Notes receivables–measured as amortized cost Less: Loss allowance	December 31, 2020
	$ 3,586,864 4,578,646

The Company 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:

	December 31, 2020	Loss allowance provision 3,426 2,337 1,432 2,486 775
Gross carrying amount	Weighted-average loss rate
$ 3,448,802 0.10% 139,457 1.68% 4,869 29.41% 3,417 72.75% 775 100.00% $ 3,597,320 December 31, 2019
		10,456
		Loss allowance provision 3,399 2,088 2,180 2,789 20,754
Gross carrying amount	Weighted-average loss rate
$ 4,330,125 0.08% 243,722 0.86% 11,221 19.43% 4,034 69.14% 20,754 100.00% $ 4,609,856
		31,210

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

Balance at January 1 Impairment losses reversed Amounts written off Balance at December 31	For the years ended December 31 2020 2019 $ 31,210 33,374 - (2,164) (20,754) -
	$ 10,456 31,210

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

(Continued)

189

Unitech Printed Circuit Board Corporation

Notes to the Financial Statements

(d) Other receivables

Tax refund receivables

December 31, 2020	December 31, 2019 34,575
$ -

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

(e) Inventories

Inventories
Raw materials and consumables Work in progress Finished goods Merchandise inventory	December 31, 2020
	$ 1,454,912 1,850,399

For the years ended December 31, 2020 and 2019, the Company recognized cost of sales and expense amounted to $13,098,140 thousand and $15,670,117 thousand, respectively. For the years ended December 31, 2020 and 2019, the amounts of loss on valuation of inventories was $8,975 thousand and $99,277 thousand, and recognized as lost of sales.

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

(f) Investments accounted for using equity method

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

Subsidiary Associates (i) Subsidiary	December 31, 2020
	$ 3,638,739 3,965,036

Please refer to Consolidated Financial statements, 2020.

(Continued)

190

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(ii) Associates

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

gnificant was as follows:
Carrying amount of individually insignificant associates’equity	December 31, 2020	December 31, 2019
	$ 40,206	41,182

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

Attributable to the Company: Loss from continuing operations Other comprehensive (loss) income Comprehensive income	2020	2019
	$ (2,750) (765) 983 333
	$ (1,767) (432)

(iii) Guarantee

As of December 31, 2020 and 2019, the Company did not provide any investments accounted as collateral for its borrowings.

(g) Loss control of subsidiaries

(i) Schmidt Scientific Taiwan Ltd.

The Company 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 Company derecognized Schmidt Scientific Taiwan Ltd. from the date of disposal as its subsidiary. The Company 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.

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:

(Continued)

191

Unitech Printed Circuit Board Corporation

Notes to the Financial Statements

$ 73,132
45,171
22,882
10,878
5,985
63,358
61,662
8,423
(36,000)
(47,452)
(14,786)
(11,391)
(114,466)
(17,312)
(30)

$
50,054

(h) Property, plant, and equipment

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

Cost or deemed cost: Balance on January 1, 2020 Additions Disposal Reclassification Balance on December 31, 2020 Balance at January 1, 2019 Additions Disposal Reclassification Balance on December 31, 2019 Deprecation and impairments loss: Balance on January 1, 2020 Deprecation Disposal Balance at December 31, 2020	Land	Buildings and constructions	Machinery and equipment	Office facilities	Other facilities	Testing equipment
	$ 407,228 2,558,482 11,970,621 317,425 4,694,141 236,150 20,184,047
	$ 407,228 2,626,284 12,119,537 272,826 4,520,897 1,004,460 20,951,232 - 30,366 260,618 39,369 149,054 391,247 870,654 - (130,598) (1,452,402) (9,084) (318,155) - (1,910,239) - 21,389 679,307 4,131 248,397 (966,962) (13,738)
	$ 407,228 2,547,441 11,607,060 307,242 4,600,193 428,745 19,897,909
	$ - 675,195 6,929,253 236,035 2,981,302 - 10,821,785 - 50,215 896,500 19,909 318,583 - 1,285,207 - - (15,854) (6,200) (20,189) - (42,243)
	$ - 725,410 7,809,899 249,744 3,279,696 - 12,064,749

(Continued)

192

Unitech Printed Circuit Board Corporation

Notes to the Financial Statements

Land $ - - - -	Buildings and constructions 754,597 50,233 - (129,635)	Machinery and equipment 7,436,782 926,013 - (1,433,542)	Office facilities 225,415 19,621 - (9,001)	Other facilities 2,954,938 331,777 (8,608) (296,805)	Testing equipment - - - -	Total
						11,371,732 1,327,644 (8,608) (1,868,983)
$ -	675,195	6,929,253	236,035	2,981,302	-	10,821,785
$ 407,228	1,833,072	4,160,722	67,681	1,414,445	236,150	8,119,298
$ 407,228	1,872,246	4,677,807	71,207	1,618,891	428,745	9,076,124
$ 407,228	1,871,687	4,682,755	47,411	1,565,959	1,004,460	9,579,500

(i)

Guarantee

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

(ii) Acquisition of machinery and equipment

The Company calculated capitalization interest rate base on 1.92% and 1.97% for the year 2020 and 2019. The capitalized borrowings related to the acquisition of machinery and equipment were $3,677 thousand and $6,356 thousand, respectively.

(iii) Assets of the Company 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 Company did not recognize any impairment loss on property, plant and equipment.

(i) Right-of-use-assets

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

Cost: Balance at January 1, 2020 Additions Disposal Balance at December 31, 2020 Balance at January 1, 2019 Effect of Retrospective application of IFRS16 Additions Disposal Transfer from property, plant and equipment Balance at December 31, 2019	Land	Buildings and constructions	Office facilities	Transportation facilities	Other assets

(Continued)

193

Unitech Printed Circuit Board Corporation

Notes to the Financial Statements

Land $ 48,627 49,260 -	Buildings and constructions 36,006 37,759 -	Office facilities 4,056 3,393 (3,039)	Transportation facilities 11,735 11,448 (1,014)	Other assets 3,333 5,985 (838)
$ 97,887	73,765	4,410	22,169	8,480
$ - 48,627	- 36,006	- 4,056	- 11,735	- 3,333
$ 48,627	36,006	4,056	11,735	3,333
$ 343,200	89,285	11,490	17,604	12,817
$ 392,460	124,732	3,125	24,479	15,648
$ -	-	-	-	-

Assets of the Company 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 Company did not recognize any impairment loss on right-or-use assets.

(j) Intangible assets

The cost, amortization and impairment of the intangible assets of the Company 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	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

(Continued)

194

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

Carrying value: Balance at December 31, 2020 Balance at December 31, 2019 Balance at January 1, 2019 (i) Amortization and impairment	Computer Software $ 108,442
	$ 36,371
	$ 37,787

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

Cost of sales Operating expense	2020
	$ 10,745 4,306

Assets of the Company 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 Company 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	Amount $ 70,000 (9) $ 69,991
	Guarantee or acceptance institution	Range of interest rates (%)
	The Shanghai Commercial & Savings Bank, LTD.	0.92%

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 Unused short-term credit lines Range of interest rates	December 31, 2020	December 31, 2020
	$ 172,631 737,499
	$ 3,725,817 2,847,406
	0.46%~0.98%	0.85%~1.10%

195

(Continued)

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(m) Long-term borrowings

The details were as follows:

	December 31, 2020	December 31, 2020	Amount $ 375,000 3,792,000 (694,500)
Currency	Rate	Maturity year
TWD TWD	1.35%~1.68% 111~112 1.10%~1.79% 111~114 December 31, 2019
			$ 3,472,500
			$ 1,880,000
			Amount $ 780,000 3,309,000 (1,252,000)
Currency	Rate	Maturity year
TWD TWD	1.45%~2.04% 1.5%~1.95%	111 111
			$ 2,837,000
			$ 1,270,000

(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 Company 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..

The amount of total credit lines is USD25,000,000 which is to repay existing

i) financial liabilities and expand working capital.

ii)

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

Period: Three years from the first draw-down date.
Payment period: The credit lines are used (revolving) during the credit period. But the expiring date of each credit amount cannot exceed the credit period.
Way to repayment: The credit line should be repaid, amortized, decreased or cancelled on the basis of the rules of agreement.

196

(Continued)

Unitech Printed Circuit Board Corporation

Notes to the Financial Statements

iii) According to the syndicated credit agreement, during the credit period, the Company is based on the second quarter 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 Company 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 repaid all the credit line on May 8, 2019.

2) The Company 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.

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

a. A type: Credit line of medium-term secured loans is NTD2,800,000,000, which can be used partly but cannot be used by revolving. 6 months from the first draw-down date. After six months, the unused amount will be cancelled automatically and shall not be used.

b. B type: Credit line of medium-term secured loans is NTD1,000,000,000, which can be used partly but cannot be used by revolving. 18 months from the first draw-down 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 NTD700,000,000, which can be used partly and can be used by revolving.

(Continued)

197

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

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

v) The Company started to use this credit line on May 31, 2017.

vi)

The Company repaid all credit line on April 30, 2020.

3) The Company 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 NTD3,800,000,000 and use for repaying the existing financial liabilities and expanding working capital.

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

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.

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 draw-down date. After six months, the unused amount will be cancelled automatically and shall not be used.

B type: Credit line of medium-term loans is NTD900,000,000,

which can be used by revolving.

Way to repayment:

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

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

(Continued)

198

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

Under any circumstances, the Company 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 Company is based on the first, second and third quarters 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 Company will adjust the financial ratios that correspond the agreement after the end of the financial report date.

iv) The Company 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 Company’s lease liabilities were as follows:

Current Non-current	December 31, 2020
	$ 407,326 457,680

For the maturity analysis, please refer to note 6(u).

The amounts recognized in profit or loss was as follows:

ts recognized in profit or loss was as follows:
Interest on lease liabilities Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets	For the years ended December 31, 2020
	$ 5,958 11,328

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

(i)

Total cash outflow for leases Real estate leases	For the years ended December 31, 2020

The Company 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.

(Continued)

199

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

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

(ii) Other leases

The Company leases office facilities, transportations and equipment, with lease terms of one to four years. In some cases, the Company 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 Company 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 Company 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
	212,723 291,613 - -
	$ 212,723 291,613

The Company 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.

1) Composition of plan assets

The Company 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 Company’s Bank of Taiwan labor pension reserve account balance amounted to $446,035 thousand and $405,409 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.

(Continued)

200

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

2) Movements in present value of the defined benefit obligations

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

Defined benefit obligations at January 1 Current service costs and interest Remeasurements loss (gain) －Actuarial loss (gain) arising from: －Financial assumptions Contributions paid by the employer Defined benefit obligations at December 31 3) Movements of defined benefit plan assets	2020
	$ 658,758 697,022

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

Fair value of plan assets at January 1 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 4) Movements of the effect of the asset ceiling	2020
	$ 446,035 405,409

There were no movements in the number of impacts of the 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 Company were as follows:

Current service costs Net interest of net liabilities for defined benefit obligations	2020
	$ 18,869 18,019

(Continued)

201

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

Operating cost Administration expense 6) Actuarial assumptions	2020	2019
	$ 4,900 5,041 13,969 12,978
	$ 18,869 18,019

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

assumptions at the reporting date were as follows:
Discount rate Future salary increase rate	December 31, 2020	December 31, 2019
	1.250% 0.750%	1.750% 0.750%

The expected allocation payment to be made by the Company 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.

7) Sensitivity analysis

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

	Influences of defined	benefit obligations
	Increased 0.25％	Decreased 0.25％
December 31, 2020
Discount rate	(17,580)	18,262
Future salary increasing (decreasing) rate	18,124	(17,531)
December 31, 2019
Discount rate	(17,655)	21,501
Future salary increasing (decreasing) rate	21,447	(17,690)

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

(Continued)

202

Unitech Printed Circuit Board Corporation

Notes to the Financial Statements

(ii) Defined contribution plans

The Company 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 $124,447 thousand and $131,593 thousand for the years ended December 31, 2020 and 2019, respectively.

(p) Income tax

(i) Income tax expense

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

Current tax expense Current period Adjustments for prior periods Deferred tax expense Origination and reversal of temporary differences Income tax (gain) expense	2020
	13,165 343,293
	(147,673) 127,750
	$ (134,508) 471,043

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

Profit (Loss) excluding income tax
Income tax using the Company’s domestic tax rate
Change in provision prior periods
Tax-exempt income
Non-deductible expenses
Tax incentives
Tax free subsidy income attributed to the epidemic
Current-year losses for which no deferred tax asset
was recognized
Additional tax on Undistributed earnings
Change in unrecognized temporary differences
Others
Income tax (gain) expense

2020

$ (314,192)
441,268
13,165
55,311
(784)
(512)
164
2,087
-
(17,814)
(70,357)
-
167,114
-
-
9,310
1,795
8,152
68,587
(26,759)

$
(134,508)
471,043

(Continued)

203

Unitech Printed Circuit Board Corporation Notes to the 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:

			December 31,		December 31,	December 31,	December 31,	December 31,
			2020				2019
	Tax effect of deductible Temporary Differences		$ 78,490					76,695
	The carryforward of unused tax loss		167,114					-
			$ 245,604					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:
			Loss
		carryforward Others						Total
	Deferred Tax Assets:
	Balance at January 1, 2020	$	-		7,495		$	7,495
	Recognized in profit or loss		160,000	(7,495)				152,505
	Balance at December 31, 2020	$	160,000	-			$	160,000
	Balance at January 1, 2019	$	134,392			853	$	135,245
	Recognized in profit or loss		(134,392)		6,642			(127,750)
	Balance at December 31, 2019	$	-		7,495		$	7,495
		Land revalue
			added
			rovaluation Other					Total
	Deferred tax liabilities:
	Balance at January 1, 2020	$	171,517	-				171,517
	Recognized in profit or loss		-		4,833			4,833
	Balance at December 31, 2020	$	171,517		4,833			176,350
	Balance at December 31, 2019
	(Equal to opening balance)	$	171,517	-				171,517

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

(Continued)

204

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(q) Capital and other equitiy

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

(in thousand of shares)

	(in thousand of shares)
Balance on January 1 Balance on December 31	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
	$ 2,843,140 2,831,974

(ii) Retained earnings

According to the Company’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.

205

(Continued)

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

Due to demand of expanding business, coordinating with Company’s long-term financial plan for sustainable development and stable economic development, The Company 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

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, 2020 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.

206

(Continued)

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

3) Earnings distribution

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

(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 defines benefits plan: The Company Subsidiary Associated Unearned employee compensation: Associated Disposal of investments in equity instruments designated at fair value through other comprehensive income: Subsidiary Disposal of subsidiary Balance at December 31, 2020	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	Remeasurement of defined benefits plan	Unearned employee compensation
	$ 41,694 232,996 (182,812) (2,622) 89,256

(Continued)

207

Unitech Printed Circuit Board Corporation

Notes to the Financial Statements

Balance at January 1, 2019 Exchange differences on translation of foreign financial statements: Subsidiary 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: The Company Balance at December 31, 2019	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	Remeasurement of defined benefits plan	Unearned employee compensation
	$ (37,584) 53,104 (189,847) (7,543) (181,870)

(Continued)

208

Unitech Printed Circuit Board Corporation

Notes to the 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 Weighted average number of ordinary shares (basic) Effect of employee share bonus Weighted average number of ordinary shares (diluted)	2020	2020
	619,407 619,407
	$ (2.32) 2.80
		$ 1,735,300
		619,407 1,400
		620,807
		$ 2.80

The profit after tax of the Company in 2020 is loss. Therefore, there is no potential diluted ordinary share.

(s) Revenue from contracts with customers

(i) Details of revenue

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
	$ 13,051,947 20,047,921

(Continued)

209

Unitech Printed Circuit Board Corporation

Notes to the Financial Statements

(t) Remuneration to employee and directors

In accordance with the Articles of Incorporation the Company 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 surplus to be allocated. Therefore, the Company did nor 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' and supervisors' 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 employees, directors and supervisors of each period, multiplied by the percentage of remuneration to employees, directors and supervisors 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 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:

The details of interest income were as follows:
Interest income from bank deposits Other interest income (ii) Other income The details of other income were as follows: Compensation income Design income Subsidy Dividend income Others	2020
	$ 403,273 57,455

Due to Covid-19, the virus has influenced the Company’s operations. In order to deal with the severe situation, the Company applied for subsidies legally. The amount of subsidies to the Company in 2020 is $351,785 thousand.

(Continued)

210

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(iii) Other gains and losses

The details of other gains and losses were as follows:

her gains and losses were as follows:
Foreign exchange losses Losses on disposals of property, plant and equipment Losses on disposal of subsidiary Compensation losses Others Miscellaneous disbursements	2020
	$ (104,518) (134,572)

(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
	$ (81,284) (108,429)

(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 Company 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 Company periodically evaluates the Company’s financial positions.

(Continued)

211

Unitech Printed Circuit Board Corporation

Notes to the 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	Contractual	Within 12		Over 5
		amount	cash flows	months	1-5years	years
December 31,2020
Non-derivative financial liabilities
Short-term borrowings	$	172,631	172,708	172,708	-	-
Short-term notes and bills payable		69,991	69,991	69,991	-	-
Trade payables		2,194,504	2,194,504	2,194,504	-	-
Trade payables-related parties		849,074	849,074	849,074	-	-
Other payable		607,558	607,558	607,558	-	-
Other payables-related parties		6,897	6,897	6,897	-	-
Long term borrowings current
portion		694,500	702,951	702,951	-	-
Lease liabilities		506,788	546,092	107,676	335,743	102,673
Long term borrowings		3,472,500	3,700,498	58,843	3,641,655	-
	$	8,574,443	8,850,273	4,770,202	3,977,398	102,673
December 31,2019
Non-derivative financial liabilities
Short-term borrowings	$	737,499	738,072	738,072	-	-
Trade payable		2,184,359	2,184,359	2,184,359	-	-
Trade payable-related parties		399,134	399,134	399,134	-	-
Other payable		687,493	687,493	687,493	-	-
Other payables-related parties		5,776	5,776	5,776	-	-
Long term borrowings, current
portion		1,252,000	1,263,146	1,263,146	-	-
Lease liabilities		555,124	592,679	105,195	328,850	158,634
Long term borrowings		2,837,000	2,947,994	52,482	2,895,512	-
	$	8,658,385	8,818,653	5,435,657	3,224,362	158,634

The Company did not expect that the timing of cash flow analysis expiary date will be early apparently, or the actual amount will be different apparently.

(Continued)

212

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(iii) Currency risk

1) Exposure to foreign currency risk

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

F		December 31, 2020			December 31, 2019
	Foreign currency	Exchange rate	TWD	Foreign currency	Exchange rate	TWD
	$ 138,096 USD/TWD= 28.48 1 EUR/TWD= 35.02 1,226 JPY/TWD= 0.28 53,310 CNY/TWD= 4.38 $ 76,482 USD/TWD= 28.48 264 EUR/TWD= 35.02 79,471 JPY/TWD= 0.28 24,894 CNY/TWD= 4.38		3,932,974 166,556 USD/TWD= 29.98 32 1 EUR/TWD= 33.59 339 1,518 JPY/TWD= 0.28 233,338 52,301 CNY/TWD= 4.31 2,178,215 55,907 USD/TWD= 29.98 9,262 264 EUR/TWD= 33.59 21,958 505,584 JPY/TWD= 0.28 108,960 24,429 CNY/TWD= 4.31			4,993,354 47 419 225,158 1,676,081 8,859 139,541 105,169
F

2) Sensitivity ananlyses

The Company’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 $14,786 thousand and $26,315 thousand. This analysis is based on foreign currency exchange rate variances that the Company 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 Company 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 $73,503 thousand and $90,644 thousand, respectively.

(Continued)

213

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(iv) Interest rate analysis

Please refer to the notes on liquidity risk management and interest rate exposure of the Company’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 Company management's assessment of the reasonably possible interest rate change.

If the interest rate had increased or decreased by 1% basis points, the Company’s net income would have increased or decreased by $46,181 thousand and $54,717 thousand for 2020 and 2019 with all other variable factors remaining constant. This is mainly due to the Company’s borrowing at variable rates and investment in variable-rate bills.

(v) Other market price risk

For the years ended December 31, 2020 2019 Other comprehensive income after tax Net income Other comprehensive income after tax Net income $ 4,676 - 3,240 -	For the years ended December 31, 2020 2019 Other comprehensive income after tax Net income Other comprehensive income after tax Net income $ 4,676 - 3,240 -	For the years ended December 31, 2020 2019 Other comprehensive income after tax Net income Other comprehensive income after tax Net income $ 4,676 - 3,240 -
2020
Other comprehensive income after tax	Net income	Other comprehensive income after tax
$ 4,676 -
$ (4,676) -		(3,240) -

(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 Company’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)

214

Unitech Printed Circuit Board Corporation

Notes to the Financial Statements

	December 31, 2020	December 31, 2020	December 31, 2020
Book Value		Fair value		Total 467,567
	Level 1	Level 2	Level 3
$ 467,567 467,567 -			-
737,633 - - 3,586,864 - - 1,969 - - 571 - -			- - - -	- - - -
4,327,037 - -			-	-
$ 4,794,604 467,567 -			-	467,567
$ 4,339,631 - - 69,991 - - 2,194,504 - - 849,074 - - 607,558 - - 6,897 - - 506,788 - -			- - - - - - -	- - - - - - -
8,574,443 - -			-	-
$ 8,574,443 - -			-	-
	December 31, 2019
Book Value		Fair value		Total 324,042
	Level 1	Level 2	Level 3
$ 324,042 324,042 -			-
721,920 - - 4,578,646 - - 7 - - 34,575 - - 12,409 - -			- - - - -	- - - - -
5,347,557 - -			-	-
$ 5,671,599 324,042 -			-	324,042

215

(Continued)

Unitech Printed Circuit Board Corporation

Notes to the Financial Statements

	December 31, 2019	December 31, 2019	December 31, 2019
Book Value $ 4,826,499 2,184,359 399,134 687,493 5,776 555,124		Fair value
	Level 1 - - - - - -	Level 2 - - - - - -	Level 3 - - - - - -	Total - - - - - -
8,658,385	-	-	-	-
$ 8,658,385	-	-	-	-

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

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

a)

Financial assets measured at amortized cost

b)

Financial assets and financial liabilities measured at amortized cost

(w) Financial risk management

(i) Overview

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

1) credit risk
2) liquidity risk
3) market risk

The following likewise discusses the Company’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.

216

(Continued)

Unitech Printed Circuit Board Corporation

Notes to the Financial Statements

(ii) Structure of risk management

The Company’s risk management policies are established to identify and analyze the risks faced by the Company, 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 Company’s activities. The Company, 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 Company Audit Committee oversees how management monitors compliance with the Company’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Company 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.

(iii) Credit risk

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

The main potential credit risk of the Company 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 Company 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 record, there is no risk of concentration on the credit risk of the 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 Company’s finance department. The Company only deals with banks, other external parties, corporate organizations, government agencies and financial institutions with good credit rating. The Company 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 Company’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 Company manages sufficient cash and cash equivalents so as to cope with its operations and mitigate the effects of fluctuations in cash flows. The Company’s management supervises the banking facilities and ensures compliance with the terms of loan agreements.

(Continued)

217

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

Loans and borrowings from the bank form an important source of liquidity for the Company. As of December 31, 2020 and 2019, the Company’s unused credit line were amounted to $5,605,817 thousand and $4,117,406 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 Company’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 Company is exposed to currency risk on sales, purchases, and borrowings that are denominated in a currency other than the respective functional currencies of the Company’s entities, primarily the TWD, US Dollar (USD), and Chinese Yuan (CNY). The currencies used in these transactions are NTD, USD and CNY.

For the Company 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.

Regarding other monetary assets and liabilities denominated in foreign currencies, when short-term imbalance occurs, the Company 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

3) Other market price risk

The Company 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 Company does not actively trade in these investments as the management of the Company minimizes the risk by holding different investment portfolios.

(Continued)

218

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(x) Capital management

The Company’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.

cture to reduce the cost of capital.
Total liabilities Less: cash and cash equivalents Net debt Total equity Debt-to-equity ratio at December 31	December 31, 2020
	$ 8,633,319 9,435,650
	$ 9,671,800 11,315,206
	89.26%	83.39%

(7) Related-party transactions

(a) The relationship between Parent company and subsidiaries were as follow:

Details of subsidiaries of the Company were as follow：

Name of Subsidiaries	Location	Owner's equity (share holders%) December 31, 2020 December 31, 2019 100.00 100.00 100.00 100.00 Note 57.17 6.10 6.10
		December 31, 2020
Unitech Electronics International Limited (Unitech BVI) Da Tai investment Company Schmidt Scientific Taiwan Ltd. Unitech Electronics International Limited (Unitech HK)	British Virgin Island Taiwan Taiwan Hong Kong

Note: Due to consideration of Group’s program, the Company made the decision with the approval from the Board on December 24, 2019 to dispose its share with a consideration of 3.96 per share on January 15, 2020. Please refer to 6(g).

(b) Parent company and ultimate controlling company

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

(Continued)

219

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

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

Name of related party Relationship with the Group Unitech Electronics International Limited The subsidiary of The Company (Unitech BVI) Da Tai investment Company The subsidiary of The Company Schmidt Scientific Taiwan Ltd.

The subsidiary of The Company (originally). (Has already disposed on January 15, 2020) The subsidiary of The Company

Unitech Electronics International Limited (Unitech HK) 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

The entity’’s president is the second immediate family of the president of the Company

The entity’s president is the first immediate family of the president of the Company

Unitech Printed Circuit Humanities and Education Foundation 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 Association Ppseawa Taiwan R.O.C. TESD Foundation

The entity’s chairman is the first immediate family of the president of the Company

The entity’s president is the first immediate family of the president of the Company The entity’s chairman is the president of the Company

Taiwan Coalition of Service Industries

The entity’s Vice-president is the president of the Company

The Business Development Foundation on the Chinese Straits

(d) Significant transactions with related parties
(i) The sales and receivables from parties were as follw:

Subsidiary	Sales	Sales	Sales
	2020	2019	December 31, 2020

The credit period for general clients are 30-120days next monthly settlement; but for related-party is 120days next monthly settlement.

(Continued)

220

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(ii) Purchase

The payables to related parties were as follows:

related parties were as follows:
Subsidiary	Purchase
	2020	2019	December 31, 2020

The payment condition to related-parties for the Company is on the basis of their capital. In general, the condition of receivables for clients is approximately 90 days; since the Company did not purchase the identical merchandise from other suppliers, price of transactions do not have comparison basis.

(iii) Property transaction

1) Acquisitions of financial assets

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

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

(iv) Loans and guarantee to Related Parties

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

As the year of December 31, 2020 and 2019, the Company made the endorsement guarantee for its subsidiary which lent money from the financial institution, the amoubt is $2,407,250 thousand and $3,413,340 thousand, respectively.

As the year of December 31, 2020 and 2019, the Company provided collaterals for its subsidiary which lent money from financial institution is amounted $38,000 thousand that classified into other financial assets- current.

(v) Other

1) The Company provided consultant service were as follows:

The Company provided consultant service were as	follows:
Subsidiaries	2020	2019 300
	$ -

2) As of December 31, 2020 and 2019, other receivables raised due to collection and payment and various expense between the Company and related parties is $571 thousand and $12,409 thousand, respectively which classified into other receivables-related parties.

(Continued)

221

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

3) 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 .

(e) The relationship between Parent company and subsidiaries were as follow:

Key management personnel compensation comprised:

Short-term employee benefits

		2020	2019
	$	67,045	154,043

(8) Pledged assets

The carrying values of pledged assets were as follows:

Pledged assets	Object	December 31, 2020	December 31, 2019
Land Building and construction Machinery and equipment Certificate of deposit (Note 1) Certificate of deposit (Note 2)	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	$ 407,228 334,415 1,833,072 1,872,246 3,302,485 3,574,272 48,000 48,000 55,733 55,413
		$ 5,646,518 5,884,346

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

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

(9) Significant commitments and contingencies:

(a) As of December 31, 2020, the total amount of the significant machinery and equipment contracts signed by the Company was approximately $476,114 thousand, and the payment of $277,962 thousand was classified into “Property, Plant and Equipment” and “Prepaid Equipment”.

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

USD JPY EUR	December 31, 2020

(Continued)

222

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(c) The Company and other 9 companies that are also shareholders of Taiwan International Securities Co., 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 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 Company is unlikely to be liable for compensation and should not have a significant impact on the Company's shareholders' equity.

(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 Company 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 Company has filed another lawsuit in Taiwan for the remaining account receivable of $20,754 thousand, and on September 11, 2019, the Company lost the lawsuit by adjudicated made by Taiwan Shilin District Court on March 25, 2020. Appeal was filed by a lawyer appointed by the Company. The Company wrote-off all the remaining account receivable.

(10) Losses Due to Major Disasters:None

(11) Subsequent Events:None

(12) Other:

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

By function By item	2020	2020	2020	2019	2019	2019
	Cost of Sale	Operating Expense	Total	Cost of Sale	Operating Expense	Total
Employee benefits
Salary	2,413,273	485,689	2,898,962	2,839,098	737,342	3,576,440
Labor and health insurance	252,024	43,240	295,264	261,537	37,532	299,069
Pension	110,908	32,408	143,316	116,782	32,830	149,612
Remuneration of directors	-	5,485	5,485	-	27,845	27,845
Others	87,012	37,256	124,268	96,807	52,017	148,824
Depletion	1,319,374	73,678	1,393,052	1,355,235	76,166	1,431,401
Amortization	1,327	12,689	14,016	336	5,870	6,206

(Continued)

223

Unitech Printed Circuit Board Corporation

Notes to the Financial Statements

The extra information for number of employee and expense of employee benefit for the Company were as follows:

Number of employees Number of directors who were not employees The average employee benefit The average salaries and wages Adjustment of Average salary expenses Supervisor's remuneration	2020
	5 5
	$ 674 786
	$ 564 673
	(16.20)% 19.96%
	$ - -

The salary payment policy for the Company were as follow:

(i) The salary payment policy, standard, portfolio and the procedure of payment regulation are on ’ ’ the basis of the Company s Human Resources regulation to execute. As for the profit allocation of director s and supervision’s remuneration, the Company will firstly do the salary provision according to the Article of Association, and then resolution by remuneration committee. After those procedure, the profit allocation will have the approval form the Board and will be reported on the shareholder’s meeting.

(ii) The relationship between remuneration payment and operating performance is positive, and will pay reasonably after the Company do the operating risk evaluation.

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

(Continued)

224

Unitech Printed Circuit Board Corporation Notes to the 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 Company:

(i) Loans to other parties: None.

(ii) Guarantees and endorsements for other parties:

No. (Note1)	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 (Note3 and 5)	Highest balance for guarantees and endorsements during theperiod	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	Relationshi p with the Company (Note2)
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
The numbers filled in for the loans provided by the Company or subsidiaries are as follows: The Company is‘0’. The subsidiaries are numbered in order starting from‘1’. 7 forms of relationships in which corporate guarantees exist are defined as follows: Entities have business relations with Company. The Company directly or indirectly holds more than 50% of voting shares of its subsidiaries. Investees directly or indirectly own more than 50% of voting shares of the Company. The Company directly or indirectly holds 90% of voting shares of its subsidiaries. Entities have construction contract agreements with the Company. The reason for the Company jointly invested in the entities is to provide proportionate endorsements. The Company has contractual pre-sold home agreements with its related parties under the Consumer Protection Law. The Company’s aggregate amount allows endorsement or guarantee that does not exceed 50% of its net worth in December 31, The Company’s aggregate amount allows endorsement or guarantee that does not exceed 80% of its net worth in December 31, The Subsidiaries aggregate amount allows endorsement or guarantee that does not exceed 200% of its net worth in December 31,

225

(Continued)

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(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	Endingbalance	Endingbalance	Endingbalance	Endingbalance
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
The Company	Capital Securities Corporation	-	Financial assets at fair value through other comprehensive income non-current	4,898	66,367	0.23%	66,367
The Company	Ideal bike Corporation	Related party	"	34,000	401,200	13.98%	401,200
Da Tai Investment Co., Ltd.	Capital Securities Corporation	-	Financial assets at fair value through other comprehensive income non-current	3,405	46,137	0.16%	46,137
Da Tai Investment Co.,Ltd.	ANCAD Incorporated	-	"	26	1,700	2.02%	1,700
Da Tai Investment Co., Ltd.	Taiwan First Biotechnolgy Corporation	-	"	5,306	93,636	4.00%	93,636

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

stock:
Name of company	Category and name of security (Note1)	Account name	Name of counter-part y (Note2)	Relationship with the company (Note2)	BeginningBalance		Purchases(Note3)		Sales(Note3)				EndingBalance
					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, net	Note5	-	-	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, net	Note6	-	-	118,336	-	701,984	-	-	-	-	-	820,320
Shanghai Unitech Electronics (Nontong) Co.,Ltd.	Structured Deposits	Financial assets at fair value through profit or loss- current	Bank of Communicat ions	None	-	-	-	131,800 (Note8)	-	131,894 (Note8)	131,800 (Note8)	94 (Note8)	-	-

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.

226

(Continued)

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(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	Relatedparty	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)
			Purchase/ Sale	Amount	Percentage of total purchases/sales	Payment terms	Unitprice	Payment terms	Endingbalance	Percentage of total notes/accounts receivable (payable)
Unitech BVI	The Company	The 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.	-	-%
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.	-	-%
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.	-	-%
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.	-	-%
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%
Shanghai Unitech Electronics (Nantong) Co., Ltd.	The Company	The Parent company	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%
Shanghai Unitech Electronics Co., Ltd.	Shanghai Unitech Electronics (Nantong) Co., Ltd.	Subsidiary	Sale	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%
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.	-	-%
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	-%
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.	-	-%
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.	-	-%
Shanghai Unitech Electronics Co., Ltd.	The Company	The 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.	-	-%

(Continued)

227

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

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

Name of company	Counter-party	Nature of relationship	Ending balance	Turnover rate	Overdue	Overdue	Amounts received in subsequentperiod	Allowance for bad debts
					Amount	Action taken
Shanghai Unitech Electronics (Nantong) Co., Ltd.	The company	The Parent company	855,971	3.01	-		16,487 (CNY3,858 thousand)	-

(ix) Trading in derivative instruments: None.

(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	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)
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)
The Company	Schmidt Scientific Taiwan Ltd.	Taiwan	Manufacture and sales of medical equipment, electronic components, and optical instruments	-	346,933	-	- %	-	2,199	1,324	Note1
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)
Da Tai Investment Co., Ltd.	Fulltech Fiber Glass Corp.	Taiwan	Manufacturing of glass and glassproducts	600,684	600,684	57,734	13.82%	955,432	(485,175)	(62,463)
Schmidt Scientific Taiwan Ltd.	Schmidt Taiwan Internationl Ltd.	British Virgin Islands	Sales of medical equipments, electronic products and solar equipment	-	18,268	-	- %	-	-	-	Note1
Schmidt Taiwan Internationl Ltd.	Schmidt Technology Inc.	British Cayman Islands	Sales of medical equipments, electronic products and solar equipment	-	16,894	-	- %	-	-	-	Note1
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)

Note1: The Company disposed all shares on January 15, 2020.

(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 of paid-in capital	Method of investment (Note1)	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	Investment income (losses) (Note2)	Book value	Accumu-lated remittance of earnings in current period
					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 (Note3)	-	-	367,320 (Note3)	(256,965)	100.00%	(256,965)	3,363,320	-

Note1: Investments are made through one of three ways:

(a) Direct investment from Mainland China

(b) Indirect investment from third-party country

Note2: The recognition of gain and loss on investment based on the financial report which was assured by R.O.C. Accountant. Note3: The amount includes the capitalization of retained earnings amounting to USD7,000 thousand.

(Continued)

228

Unitech Printed Circuit Board Corporation Notes to the Financial Statements

(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) (Note3)	2,987,438 (USD 104,896 thousand)	5,803,080

(iii) Significant transactions:

The significant inter-company transactions with the subsidiary 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%

(14) Segment information:

Please refer to 2020 Consolidated Financial Statements.

229

Unitech Printed Circuit Board Corporation

Statement of cash and cash equivalents

December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Item	Description	Amount $ 674
Cash on hand Bank deposits	Petty cash Demand deposits Chang Hwa Bank Zhongshan North Road Branch Chang Hwa Bank Tucheng Branch Land Bank of Taiwan Tucheng Branch Others (All of them are less than 5%) Subtotal Foreign currency deposits Chang Hwa Bank Zhongshan North Road Branch (USD9,326 thousand) Mega International Commercial Bank Bannan Branch (USD3,115 thousand) Chang Hwa Bank Zhongshan North Road Branch (USD14,654 thousand) Bank SinoPac Dunbei Branch (USD2,212 thousand) Taishin International Bank Songshan Branch (USD2,090 thousand) Taipei Fubon Commercial Bank Dunhua Branch (USD2,022 thousand) Bank of Taiwan Tucheng Branch (CNY1,248 thousand) Others (All of them are less than 5%) Subtotal
		28,471 28,275 19,022 9,377
		85,145
		261,630 87,595 62,902 62,277 58,769 56,771 35,026 26,844
		651,814
		$ 737,633

230

Unitech Printed Circuit Board Corporation

Statement of trade receivables

December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Item Non Related-parties: T66 A58 G57 C37 Others (less than 5%) Subtotal Less: Allowance for bad debt Net value	Amount $ 691,017 613,603 554,501 200,175 1,538,024
	3,597,320 (10,456)
	$ 3,586,864

Statement of inventories

Item	Amount	Amount	Remark
	Cost	Net realizable value
Raw materials and consumables Work in Progress Finished goods Merchandise inventory Subtotal Less: Allowance for Inventory Valuation Losses Total	$ 247,714 290,999 adopted replacement cost 858,110 1,145,862 adopted Net realizable value 315,554 333,795 〃 249,142 249,142 〃 1,670,520 2,019,798 〃 (215,608) 〃 $ 1,454,912

231

Unitech Printed Circuit Board Corporation

Statement of financial assets measured at fair value through other

comprehensive income - non-current December 31, 2020 (Expressed in thousands of New Taiwan Dollars)

Item	January 1,2020	January 1,2020	Addition	Addition			Disposal	Evaluation	December 31, 2020	December 31, 2020
	Number of shares	Fair value	Number of shares	Amount	Number of shares	Amount			Number of shares	Fair value
Non-current: Capital Securities Corporation 4,898 $ 55,102 - Ideal Bike Corporation 34,000 268,940 - $ 324,042				- -	- -	- -	- -	11,265 4,898 66,367 N/A 132,260 34,000 401,200 N/A 143,525 467,567
				-		-	-

Unitech Printed Circuit Board Corporation

Statement of changes in investments accounted for using the equity method

December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Investee	January 1, 2020 Number of shares Amount 3.75 $ 2,621,883 82,000 1,118,950 4,785 27,292 2,540 41,182 5,000 155,729 $ 3,965,036	January 1, 2020 Number of shares Amount 3.75 $ 2,621,883 82,000 1,118,950 4,785 27,292 2,540 41,182 5,000 155,729 $ 3,965,036	Addition Number of shares Amount - - - - - - - - - - -	Addition Number of shares Amount - - - - - - - - - - -	Deductions Number of shares Amount - - - - (4,785) (44,080) - - - - (44,080)	Deductions Number of shares Amount - - - - (4,785) (44,080) - - - - (44,080)		December 31, 2020 Shareholding ratio(%) Amount 100.00 2,343,979 100.00 1,116,451 - - 0.61 40,206 6.10 138,103 3,638,739	December 31, 2020 Shareholding ratio(%) Amount 100.00 2,343,979 100.00 1,116,451 - - 0.61 40,206 6.10 138,103 3,638,739	Endorsement or Pledge
	Number of shares 3.75 82,000 4,785 2,540 5,000		Number of shares - - - - -		Number of shares - - (4,785) - -		Name of shares 3.75 82,000 - 2,540 5,000	Shareholding ratio(%) 100.00 100.00 - 0.61 6.10
Valuation accounted for equity method: Unitech Electronics International Limited (BVI) Da Tai Investment Company Schmidt Scientific Taiwan LTD. Full Tech Fiber Glass Corp. Unitech Electronics International Limited (HK)										N/A N/A N/A N/A N/A
		$ 3,965,036		-		(44,080)			3,638,739

Unitech Printed Circuit Board Corporation

Statement of short-term borrowings

December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Creditor	Characteristic of borrowings	December 31, 2020	Period	Credit line Pledges or collaterals
Shin Kong Commercial Bank Credit loan Land Bank of Taiwan 〃 Bank Of Panshin 〃 First Commercial Bank 〃 Add:Exchange gains and losses Total		$ 100,000 A year 69,299 〃 1,666 〃 1,657 〃 9 $ 172,631		200,000 N/A 200,000 〃 150,000 〃 120,000 〃

Note: The interest interval is between 0.46%~0.98%.

Statement of trade payables

Item Non related-parties: Lin Horn Technology Co.,Ltd Elite Material Co.,Ltd. Atotech Twiwan Limited Corp. Others (less than 5%) Subtoal Less: Gain on exchange rate Total	Amount $ 366,707 137,267 115,420 1,603,946
	2,223,340 (28,836)
	$ 2,194,504

234

Unitech Printed Circuit Board Corporation

Statement of other payables

December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Item Salary payables Equipment payables Others Total	Amount $ 399,101 154,151 453,371
	$ 1,006,623

Statement of long-term borrowings

Ammount of borrowings

	Ammount of	borrowings
Item Yuanta Commercial Bank Yuanta Commercial Bank Mega International Commercial Bank Bank of Taiwan Syndicated Kaohsiung Commercial Bank Total	Current portion - 100,000 172,000 362,500 60,000	Non-current portion 550,000 150,000 170,000 2,537,500 65,000	Contract Period	Pledges or collaterals
			112.06 112.06 111.11 114.04 112.03	Land and Buildings N/A Land and Buildings Land, Buildings and Facilities N/A
	$ 694,500	3,472,500

Note: The interest interval is between 1.1%~1.79%.

235

Unitech Printed Circuit Board Corporation

Statement of operating revenue

For the year ended December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Item Layer of 2 HDI Layer of 4 HDI Layer of 6 HDI Layer of 8 HDI Over layer of 10 HDI Others Net sales	Quantity (Unit:sq ft) 631.00 3,348.00 2,181.00 1,265.00 2,702.00 -	Amount $ 218,799 1,635,919 2,487,965 1,498,841 7,098,660 111,763
		$ 13,051,947

Summary statement of current period employee benefits, depreciation, depletion and amortization expenses by function

Item Selling expenses and administrative expenses: Salary expenses Miscellaneous expense Freight expenses Commissions expense Others (less than 5% for each item) Subtotal Research and development expenses Total	Amount $ 479,946 171,466 68,793 95,919 424,267 1,240,391 76,590 $ 1,316,981

236

Unitech Printed Circuit Board Corporation

Statement of operating costs

For the year ended December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Item Direct raw material Balance, beginning of year Add: raw material purchased Less: transferred to manufacturing expenses transferred to operating expenses direct raw material, end of year Subtotal Indirect raw material Balance, beginning of year Add: raw material purchased Less: transferred to manufacturing expenses transferred to operating expenses indirect raw material, end of year Subtotal Direct labor Manufacturing expenses Manufacturing cost Add: work in process, beginning of year Less: work in process, end of year transferred to other losses transferred to research and development expenses Cost of finished goods Add: finished goods, beginning of year finished goods(warehouse), beginning of year Less: finished goods, end of year transferred to other losses finished goods(warehouse), end of year Cost of goods sold- finished goods Merchandise, beginning of the year Add: Merchandise purchased Less: Merchandise, end of the year Cost of merchandise sold Add: losses on inventory valuation and obsolescence Less: advertisement expense and sample expenses Income from scrap sales Cost of sales	Amount $ 104,657 2,099,432 (20,710) (1,022) (110,438)
	2,071,919
	95,252 2,305,972 (465,514) (1,006) (137,276)
	1,797,428
	2,099,758 4,121,833
	10,090,938
	1,141,229 (858,109) (1,008) (26,151)
	10,346,899
	225,284 206,755 (143,853) (3,612) (171,702)
	10,459,771
	283,855 2,807,495 (249,142)
	2,842,208
	8,975 (29,365) (174,474)
	$ 13,107,115

Statement of change in cost and accumulated depreciation of property, plant and equipment refer to note6(h).

Statement of change in cost and accumulated depreciation of right-of-use assets refer to note6(i).

237

VI. Any insolvency to the Company and its affiliates in the previous period to the day this report was printed: None. Seven. Review of financial position and financial performance, and assessment of risks I. Comparative analysis of financial position:

I. Comparative analysis of financial position:	I. Comparative analysis of financial position:	I. Comparative analysis of financial position:
			Unit: NT$thousand;%
Year Item 2020 2019 Difference Amount ％ Current assets 5,920,026 7,345,702 (1,425,676) -19.41% Non-current assets 13,122,726 14,127,074 (1,004,348) -7.11% Total assets 19,042,752 21,472,776 (2,430,024) -11.32% Current liabilities 5,102,053 6,399,760 (1,297,707) -20.28% Non-current liabilities 4,268,899 3,757,810 511,089 13.60% Total liabilities 9,370,952 10,157,570 (786,618) -7.74% Capital of common shares 6,194,072 6,194,072 0 0.00% Capital surplus 2,843,140 2,831,974 11,166 0.39% Retained earnings 545,332 2,471,030 (1,925,698) -77.93% Other equity 89,256 (181,870) 271,126 -149.08% Treasuryshares 0 0 0 0 Total equity 9,671,800 11,315,206 (1,643,406) -14.52% Total liabilities and shareholders equity 19,042,752 21,472,776 (2,430,024) -11.32% Note to items of significant change (change exceeding 50%) 1. Retained earnings fell due to the loss in 2020. 2. Other equity increased due to the market value of stocks held in 2020 "financial assets measured by other comprehensive profit and loss"	2020	2019	Difference
			Amount	％
	5,920,026	7,345,702	(1,425,676)	-19.41%
	13,122,726	14,127,074	(1,004,348)	-7.11%
	19,042,752	21,472,776	(2,430,024)	-11.32%
	5,102,053	6,399,760	(1,297,707)	-20.28%
	4,268,899	3,757,810	511,089	13.60%
	9,370,952	10,157,570	(786,618)	-7.74%
	6,194,072	6,194,072	0	0.00%
	2,843,140	2,831,974	11,166	0.39%
	545,332	2,471,030	(1,925,698)	-77.93%
	89,256	(181,870)	271,126	-149.08%
	0	0	0	0
	9,671,800	11,315,206	(1,643,406)	-14.52%
	19,042,752	21,472,776	(2,430,024)	-11.32%

II. Comparative analysis of financial performance:

Unit: NT$ thousand; %

Year Item	2020	2019	Amount change	Proportion of change (%)
Net sale	13,051,947	20,047,921	(6,995,974)	-34.90%
Cost of operation	13,107,115	15,769,394	(2,662,279)	-16.88%
Grossprofit	(55,168)	4,278,527	(4,333,695)	-101.29%
Operatingexpense	1,316,981	2,026,729	(709,748)	-35.02%
Operatingincome(loss)	(1,372,149)	2,251,798	(3,623,947)	-160.94%
Non-operatingincome and expense	(198,811)	(45,455)	(153,356)	337.38%
Earnings(loss)before taxation	(1,570,960)	2,206,343	(3,777,303)	-171.20%
Less: income tax expense	(134,508)	471,043	(605,551)	-128.56%
Net income(loss)in currentperiod	(1,436,452)	1,735,300	(3,171,752)	-182.78%
Note to items of significant change (change exceeding 50%) 1. Gross profit fell due to the sizable cut of purchase orders for FPCB and the influence of price down. 2. Operating profit fell due to the decline of gross profit. 3. Operating income and expense fell due to the loss of investment accounted for under the equity method. 4. Earnings before taxation fell due to the decline of gross profit. 5. Income tax expense decreased due to the net loss before taxation. 6. Net income fell in currentperiod due to the decline ofgrossprofit.

III. Cash flow analysis:

III. Cash flow analysis:	III. Cash flow analysis:	III. Cash flow analysis:	III. Cash flow analysis:
(I)Analysis of cash flow in 2020:				Unit: NT$thousand
Cash balance at the beginning of period	Net cash flow from operation of the period	Net cash flow from investment and financial of theperiod	Amount of cash surplus (short)	Remedyfor cash short
				Investment plan	Wealth management plan
721,920	1,526,525	(1,510,812)	737,633	---	---

Cash flow from operation approximately amounted to N$1,526 million mainly due to the cash inflow from

238

operation is more than cash outflow.

  2. Cash flow from investment approximately amounted to $527 million mainly due to the purchase of machine and equipment and SAP system.

  3. Cash flow from financing approximately amounted to $983 mainly due to the retirement of short-term loans and the payment of cash dividend.

(II) Remedy for cash short and liquidity analysis: not applicable.
(III) Liquidity analysis in the year ahead: the Company expected that equity capital and bank loans will be sufficient for covering capital expenditures.
IV. Major capital expenditures in the previous period and its influence on financial position and operation:
(I) The purpose of significant capital expenditures and the sources of capital

				Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand
The plan	Actual or expected sources of capital	Actual or expected date of completion		Actual or expected use of fund
			2020	2011	2012	2013	2024	2025
Machine and equipment purchase	Equity capital	2020.12.31	457,563
Machine and equipment purchase	Equity capital	2021.12.31		699,315
Machine and equipment purchase	Equity capital	2022.12.31			1,000,000
Machine and equipment purchase	Equity capital	2023.12.31				1,000,000
Machine and equipment purchase	Equity capital	2024.12.31					1,000,000
Machine and equipment purchase	Equity capital	2025.12.31						1,000,000

(II) Expected result

Year	Item	Production volume (SF)	Sale volume (SF)	Sale value (NT$thousand)	Gross profit (NT$thousand)
2021	PCB	12,246,622	12,246,622	14,500,000	1,305,000
2022	PCB	12,858,953	12,858,953	15,225,000	1,522,500
2023	PCB	13,501,901	13,501,901	15,986,250	1,758,488
2024	PCB	14,176,996	14,176,996	16,785,563	2,014,268
2025	PCB	14,885,846	14,885,846	17,624,841	2,291,229

239

V. Investment policy over the last 5 years, the main reason for profit or loss, corrective action plan, and the investment plan of the year ahead

V. Investment policy over the last 5 years, the main reason for profit or loss, corrective action plan, and the investment plan of the year ahead	V. Investment policy over the last 5 years, the main reason for profit or loss, corrective action plan, and the investment plan of the year ahead	V. Investment policy over the last 5 years, the main reason for profit or loss, corrective action plan, and the investment plan of the year ahead	V. Investment policy over the last 5 years, the main reason for profit or loss, corrective action plan, and the investment plan of the year ahead	V. Investment policy over the last 5 years, the main reason for profit or loss, corrective action plan, and the investment plan of the year ahead	V. Investment policy over the last 5 years, the main reason for profit or loss, corrective action plan, and the investment plan of the year ahead	V. Investment policy over the last 5 years, the main reason for profit or loss, corrective action plan, and the investment plan of the year ahead
2020.12.31(Unit : thousand)
Item Company type	Investment amount	Amount of profit or loss	Policy	Main reason for profit or loss	Corrective action plan	Investme nt plan of the future
UNITECH ELECTRONICS INTERNATIONAL LIMITED	USD 75,000	NTD (339,678)	Investment in Shanghai Unitech Electronics Co., Ltd.	Investment loss accounted for under the equity method	Reduce the scrap rate of products, upgrade production efficiency, and reasonable control of expense.	---
UNITECH ELECTRONICS INTERNATIONAL (HK) LIMITED	USD 5,000	NTD (362,186)	Investment in Shanghai Unitech Electronics Co., Ltd.、Shanghai Unitech Electronics (Nantong)Co.,Ltd.	Investment loss accounted for under the equity method	Reduce the scrap rate of products, upgrade production efficiency, and reasonable control of expense.	---
Da-Tai Investment Co., Ltd.	NTD 820,019	NTD (62,116)	General investment company	Investment loss accounted for under the equity method	Bolster the control of investment operation and enhance the stable sources of profit	--
Semicon Taiwan	Not applicable	NTD 2,199	Trading of medical devices, electronic parts and components, and optical instruments.	on 2020.01.15 Disposed the equity shares	Not applicable	--

VI. Analysis and assessment of risks:

(I) The influence of interest rate and exchange rate fluctuation and inflation on the income status of the Company and the plan in response:

response:
Item	2020(NT$thousand)
Interest expense	81,284
Exchangegain(loss)	(73,503)

PCB is in an capital-intensive and technology-intensive industry with huge investment in fixed assets. In addition, capital requirement in different aspects is also high. Major materials for the equipment and manufacturing are mostly supplied for US and Japanese firms. In addition, the marketing and sale are also export-oriented with quotation basing on the local currencies of the customers. As such, fluctuation of exchange rate and interest rate will trigger relevant changes in exchange gains or loss and interest expense, which in turn affected the profit status of the Company.

Inflation: The Company has not been significantly affected by inflation on its income status so far.

(II) The policy of engagement in high risk, high leverage investment, loaning to a third party, endorsement and guarantee, and derivative trade, the main reason for profit or loss, and the policy in response: The Company did not engage in high risk and high leverage investment, and has undertaken endorsement and guarantee in favor of a third parties in accordance with applicable rules and regulations of the Company.
(III) R&D plan in the future and expected investment in R&D:

R&D plan in the future	Further investment required for R&D (NT$thousand)
Development of PTFE antennae board	19,200
Development of Small cell PCB
Development of AR/VR FPCB

(IV) The influence of the changes in important policies and regulatory environment in the home country on the financial position and operation of the Company, and the policy in response to the changes: None.
(V) The influence of the changes in the technological and industrial environment on the financial position and operation of the Company, and the policy in response to the changes: None.

240

(VI) The influence of the change in corporate image on crisis management of the enterprise, and the policy in response to the change: None.
(VII) Expected result and possible risk from mergers and acquisitions: None.
(VIII) Expected result and possible risk from capacity expansion: None.
(IX) The risks deriving from concentration of purchase or sale: None.
(X) The influence of massive transfer or replacement of shares by the Directors, Supervisors, or shareholders each holds more than 10 % of the shares issued by the Company and the risk thereof: None.
(XI) The influence of change in the management of the Company and the risk thereof: None.
(XII) In the area of legal proceedings of non-litigation matters, specify the names of the Directors, Supervisors, general managers, legal representatives, shareholders each holds more than 10% of company shares, and subsidiaries with final ruling or still in proceedings of major legal proceedings, non-litigation matters or administrative disputes, and the result of which may significantly affect shareholders equity or stock price. In addition, disclose also the fact of the contentions, the amount involved, the day of commencement of the proceedings, the major litigants in the proceedings, and the status as of the day this report was printed:

In June 2013, a default customer declined to settle the payment with the Company. Instead, this customer file a law suit against the Company with product quality problem as a pretext. This case was trialed at Jiansu Province Suzhou Intermediate People’s Court with ruling on December 17 2015 that the customer lose in the case and required to settle the remainder of the proceeds with the Company plus accrued interest and the fee incurred from the legal proceedings. In October 2018, a customer declined to settle the proceeds with the Company. The Company petitioned with the court for compulsory action. The Customer has paid $4,769 thousand. The Company further filed a law suit against this customer to claim for the remaining $20,754 thousand with the court of Taiwan. Taiwan Shilin District court ruled not in favor of the Company on September 11 2019. The Company filed an appeal through legal counsels. Again, the High Court of Taiwan ruled not in favor of the Company on March 25 2020. The Company decided no further appeal, and referred the remainder of the proceeds in full amount for write-off against the allowance for bad debts.

Chairman Chang Yuan-Min of the Company was charged by the Public Prosecutors Office of Taipei District Court under 2020 Zheng-Zi No. 19540 on June 11 2013 in connection with an alleged violation against the Securities and Exchange Act when Chairman Chang was the Chairman of Taiwan First Securities. Chairman Chang acquitted in the ruling of the firs trial. The Prosecutors filed an appeal. The case is proceeding at the High Court of Taiwan. Significant influence on the financial position and operation on the Company is unlikely.

(XIII) Other important risks and policies in response to these risks: information security risk and policies to deal with the risk:

The mainframe and data equipment of the Company are placed in an IT machine room under strict control equipped with stable air-conditioning and UPS for the continued operation and service of the data center. In addition, all services were backup and all the magnetic tapes are stored in fire-proof cabinet for easy access for viewing and audit in the future. Real-time backup mechanism is in place for the main system under the double-backup structure. In case one machine room cannot function normally, all services could be switched to the other machine room at once for assurance of no interruption. For the further upgrade of the capacity in recovery after disaster, the Company holds exercise drill for the backup of essential system once quarterly.

The projects for the main system in this year:

Information network

Design the plan for the replacement of core network exchange devices and network of the core office area to reduce the operation risk possible triggered by obsolete machines. The replacement is expected to complete in this year.

Replacement of obsolete computers

In responding to the suspension of system backup for the Window 7 OS, the Company planned to replace all computers with the Window 10 OS to reduce possible information security risk caused by the defects in operation.

Reinforcement of computer information security of the equipment

Installation of close-end network and continue the introduction of antivirus wall mechanism to avoid virus infection after the machine is connected to the network that affected production. In addition, data transmission and the use of USB is under strict control. The control of PIN for access to machine is intensified to minimize the possibility of entry from the backdoor.

Fortification of the mainframe security

Pursue the strategy of creating a list of mainframe to restrict files of unidentified sources and the import of files by human action to avoid malignant program intrusion that resulted in the encryption of essential system files.

Backup with virtual server

Plan to establish image backup for the virtual server that enables the virtual server to restore the whole system through the

241

real-time backup system in case of mainframe failure or malfunction. This helps to mitigate the impact on the operation of the Company.

Conclusion:

The IT function of Unitech reviews its information security strategy every year, and continues to bolster all areas of information security for alignment with the current status of information security. It also takes various measures for protection for assurance of the sustainable operation of the information system. It is impossible to guarantee no weakness manipulated by a third party with intent of using or intruding into the system, the Company will appoint external professionals to scan the weakness regularly in the year for the strict enforcement of information security and review possible risk.

The Company will also purchase necessary software and hardware in line with the trend of information security every year for rectifying the weakness and assuring the continuation of essential information services of the Company and reducing operation risk.

VII. Other materiality: None

242

Eight. Important information

  - I. Information on affiliates

     - (I) Business Report on Affiliates

Outlook of the Affiliates:
(1) Organizational chart of the affiliates (2020.12.31)

==> picture [417 x 276] intentionally omitted <==

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

Unitech Printed Circuit Board Corp.
100%
100% 6.1%
Unitech Electronics Da-Tai
International Investment Co., Ltd.
Limited
93.9%
Unitech Electronics International
(HK) Limited
100% 10%
Shanghai Shanghai Unitech
Unitech 90% Electronics
Electronics (Nantong) Co.,
Ltd.
Co., Ltd.
----- End of picture text -----

(2)Basic information on the affiliates

				2020.12.31(Unit: thousand)) Principal business or premium products Investment in Unitech Electronics International (HK) Limited Investment in Shanghai Unitech Electronics Co., Ltd. which in turn invested in Shanghai Unitech Electronics(Nantong)Co.,Ltd. Manufacturing and sale of PCB Manufacturing and sale of PCB General Investment
Name of enterprise	Date of incorporation	Address	Paid-in capital	Principal business or premium products
Unitech Electronics International Limited	1995-08-10	Vistra Corporate Services Centre Wickhams ,Cay II Road Town ,Tortola VG110 Virgin Islands,British	USD 75,000	Investment in Unitech Electronics International (HK) Limited
Unitech Electronics International (HK) Limited	2007-11-21	2/F, Jonsim Place, No. 228 Queen’s Road East, Wanchai, HK	USD 82,000	Investment in Shanghai Unitech Electronics Co., Ltd. which in turn invested in Shanghai Unitech Electronics(Nantong)Co.,Ltd.
Shanghai Unitech Electronics Co., Ltd.	1995-12-21	Room 407, Tower No. 2, No. 999, Huaxu Highway, Xujing Town, Qingpu District, Shanghai	USD 76,800	Manufacturing and sale of PCB
Shanghai Unitech Electronics (Nantong) Co., Ltd.	2018-02-08	No. 99, Xiwang Blvd, Gaoxin District, Nantong	USD 108,000	Manufacturing and sale of PCB
Da-Tai Investment Co., Ltd.	1998-09-25	28F, No. 216, Tunhua South Road Section II, Taipei	NTD 820,000	General Investment

(3) Information on shareholders or Directors presumed to have control or in subordination pursuant to Article 369 of the Company Act: not applicable.
(4) Operation and division of labor of all affiliates:
The Company, Unitech Electronics International Limited, Unitech Electronics International (HK) Limited, and Shanghai Unitech Electronics Co., Ltd. are engaged in the design, manufacturing, and trade of multi-layer PCB. Unitech Electronics International Limited invested to establish Unitech Electronics International (HK)Limited which in turn invested to establish Shanghai Unitech Electronics (Nantong) Co., Ltd. as a foothold for expansion in the market of Mainland China.

Da-Tai Investment Co., Ltd. in an investment firm.

(5)Information on Directors and Supervisors of the affiliates:

			2020.12.31(Unit: share/%) Quantityof shareholding Quantity of shareholding Proportion of shareholding. 3,750 100.00% 77,000,100 93.90% --- 100.00% 82,000,000 100.00% --- 90% --- 10%	2020.12.31(Unit: share/%) Quantityof shareholding Quantity of shareholding Proportion of shareholding. 3,750 100.00% 77,000,100 93.90% --- 100.00% 82,000,000 100.00% --- 90% --- 10%
Name of enterprise	Title	Name or representative	Quantityof shareholding
			Quantity of shareholding	Proportion of shareholding.
Unitech Electronics International Limited	Director	Representative of Unitech Printed Circuit Board Corp.: Chang Yuan-Min	3,750	100.00%
	Director	Representative of Unitech Printed Circuit Board Corp.: Chen Cheng-Hsiung
Unitech Electronics International (HK) Limited	Director	Representative of Unitech Electronics International Limited: ChangYuan-Fu	77,000,100	93.90%
	Director	Representative of Unitech Electronics International Limited: Chen Cheng-Hsiung
Shanghai Unitech Electronics Co., Ltd.	Chairman	Representative of Unitech Electronics International (HK)Limited: ChangYuan-Min	---	100.00%
	Director	Representative of Unitech Electronics International (HK)Limited: Hsu Cheng-Hung
	Director	Representative of Unitech Electronics International (HK)Limited: Chen Cheng-Hsiung
	Director	Representative of Unitech Electronics International (HK)Limited: ChangPing-Chao
	Director	Representative of Unitech Electronics International (HK)Limited: HungHsien-Ching
	Supervisor	Representative of Unitech Electronics International (HK)Limited: ChangYuan-Fu
Da-Tai Investment Co., Ltd.	Chairman	Representative of Unitech Printed Circuit Board Corp.: ChangPing-Chao	82,000,000	100.00%
	Director	Representative of Unitech Printed Circuit Board Corp.: Chen Cheng-Hsiung
	Director	Representative of Unitech Printed Circuit Board Corp.: ChangYuan-Min
	Supervisor	Representative of Unitech Printed Circuit Board Corp.: ChangYuan-Fu
Shanghai Unitech Electronics (Nantong) Co., Ltd.	Chairman	Representative of Shanghai Unitech Electronics Co., Ltd.: ChangYuan-Min	---	90%
	Director	Representative of Shanghai Unitech Electronics Co., Ltd.: HsungCheng-Hung
	Director	Representative of Shanghai Unitech Electronics Co., Ltd.: Chen Cheng-Hsiung
	Director	Representative of Shanghai Unitech Electronics Co., Ltd.: ChangPing-Chao
	Supervisor	Representative of Shanghai Unitech Electronics Co., Ltd.: ChangKai-Cheng,Chin-FangWu
	Director	Representative of Unitech Electronics International (HK)Limited: ChangYuan-Fu	---	10%
	Supervisor	Representatives of Unitech Electronics International (HK)Limited: ChangKai-Cheng,Chin-FangWu

2. Business highlights of the affiliates:

Financial position and operation result of the affiliates:

					2020.12.31(Unit: NT$thousand;earnings	2020.12.31(Unit: NT$thousand;earnings	2020.12.31(Unit: NT$thousand;earnings	per share/NT$)
Name of enterprise	Stated Capital	Total assets	Total liabilities	Net	Revenue	Operating income	Income (loss)in current period	Earnings per share
Unitech Electronics International Limited	2,414,937	2,664,701	320,411	2,344,290	314,850	5,297	(339,678)	---
Unitech Electronics International (HK) Limited	2,634,907	2,801,930	2,069	2,799,861	0	(131,689)	(362,186)	---
Shanghai Unitech Electronics Co., Ltd.	2,474,777	3,839,963	1,374,375	2,465,588	1,496,205	(684,569)	(335,339)	---
Shanghai Unitech Electronics (Nantong) Co., Ltd.	3,639,130	7,818,160	4,454,853	3,363,307	2,237,088	(288,368)	(256,965)	---
Da-Tai Investment Co., Ltd.	820,000	1,117,086	635	1,116,451	0	(63,217)	(62,116)	(0.75)
Semicon Taiwan	83,700	291,491	241,437	50,054	6,045	2,200	2,199	---

Note: 2020/12/31, the exchange rate between USD and TWD @28.48 2020/12/31 the exchange rate between CNY and TWD ＠4.3648

The weighted average exchange rate between USD and TWD in 2020 @ 29.5332 The weighted average exchange rate between CNY and TWD in 2020 ＠4.2813

The equity shares issued by Semicon Taiwan were fully disposed as of 2020.01.25.

(II) Declaration

Declaration

In 2020 (from January 1, 2020 to December 31, 2020), the related entities that are required to be included in the preparation of the consolidated financial statements of the Company, under the “Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” are the same as those defined in International Financial Reporting Standards (IFRS) No. 10 "Consolidated Financial Statements." In addition, the information which shall be disclosed in the combined financial statements of affiliated companies is included in the consolidated financial statements of the parent company. Consequently, there will be no separate preparation of combined financial statements of affiliated companies.

Your attention is requested

Company name: Unitech Printed Circuit Board Corp. Chairman: Chang Yuan-Ming

Date: 2021.03.30

(III) Report on affiliation: not applicable

II. Offering of securities through private placement in the previous period to the day this report was printed: None.

III. Holding or disposal of the shares issued by the Company by its subsidiaries in the previous period to the day this report was printed: None.

IV. Other supplementary information: None.

Nine. The occurrence of events as stated in Subparagraph 2 of Paragraph 3 under Article 36 of the Securities and Exchange Act in the previous period to the day this report was printed that significantly affected the shareholders equity or stock price of the Company: None.

Unitech Printed Circuit Board Corp.

Chairman: Chang Yuan-Min

AI assistant

UNITECH — Annual Report 2020

52034_rns_2021-08-11_b19ef582-dd1c-410f-bfde-0dfa02edffc5.pdf

Unitech Printed Circuit Board Corp.

2020

Annual Report

Unitech Printed Circuit Board Corp.

Table of content

One. A Message to Shareholders

Dear Shareholders,

Financial Result and Business Report in 2020

Business Plan of 2021

Development Strategy in the future

Macroeconomic Factors:

External Competitive Environment:

Demand:

Corporate Development Strategy:

1. Focus on the structure for profit for increasing the ratio of revenue from niche products.

(1) Vehicle mounted PCB:

2. Careful assessment of market trend, active expansion of production capacity for niche products, introduction of automated and smart production in consideration of investment cost and economic performance.

3. Continue to launch CSR and development of Green Unitech

Two. Company Profile

I. Company Profile:

(II) Company history (to 2021.04.30):

Three. Report on Corporate Governance

(II) Function of the functional units:

II. Profiles of Directors, President, Vice Presidents, and heads of functions and branches:

(I) Profiles of the Directors

Table 1: Dominant shareholders of Institutional Shareholders

Table 2: If the dominant shareholders are institutional shareholders, the dominant shareholders behind these shareholders

2. The expertise knowledge and state of independence of the Directors:

III. Remunerations to Directors, Supervisors, President, and Vice Presidents in the previous period(2020)

Scale of payment for remuneration

4. Names of managers with payment of remuneration to employees and the payment status

IV. Status of Corporate Governance:

(I) The function of the Board:

Supervisors is specified below:

printed). The attendance of the Directors is shown below:

(II) The gravity of work of the Audit Committee and the pursuit:

Directors is shown below:

Additional information:

 Summary of the communications between the Independent Directors and the Chief Internal Auditors:

 The summary of communication between the Independent Directors and the Independent Auditors:

1. Profiles of the members of the Compensation Committee

2.Function of the Remuneration Committee

3. Information on the operation of the Remuneration Committee

Unitech Printed Circuit Board Corp.

General Meeting of Shareholders in 2020

V. Information of audit fee for Independent Auditors

Payment scale for service charge to CPAs

(I) The predecessor CPAs

Four. Offering of shares of raising capital

2. Preferred shares: none

V. Market price, net value, earnings (loss) per shares and related information in the last 2 years

VI. Dividend policy and implementation

1. Dividend Policy

XV. Acquisition or acceptance of assigned new shares from other companies: None

Five. Operation Highlight

I. Content of business

3. Competition and development trend of the industry

(III) Technology and R&D

2. Technologies or products successfully developed in the previous period to the day this report was printed.

II. Market, production and sale

2. Market Share

3. Supply and demand in market in the future and growth

4. Competitive Edge

2. Production process

Information on major suppliers in the last 2 years

2. List of major sale:

Information on major customers of sale in the last 2 years

V. Labor Management Relation

1. Employee benefit policy:

VI. Major contracts:

Six. Financial Outlook

(I) Condensed Balance Sheet and Comprehensive Income Statement

Condensed Balance Sheet (Separate)

Condensed Balance Sheet (consolidated)

Condensed Comprehensive Income Statement (Separate)

Condensed Income Statement (Consolidated)

(II) Name of CPA and audit opinions:

UNITECH Annual Report 2020