ZENITRON — Annual Report 2020

Jul 15, 2021

Stock Code： 3028

增你強股份有限公司 Zenitron Corporation

2020

Annual Report (Translation)

Printed Date: May 20, 2021

Market Observation Post System: http://mops.twse.com.tw Company Website: http://www.zenitron.com.tw

• I. The name, title, telephone number, and e-mail of the Company’s spokesperson and acting spokesperson:

Spokesperson ：

Name: Yeh, Lu-Chang Title: General Manager Tel: (02)2792-8788 E-mail:tommy_yeh@zenitron.com.tw

Acting spokesperson :

Name: Chou, Chun-Hsien Title: CEO Tel: (02)2792-8788 E-mail:michael_chou@zenitron.com.tw

II. Address and telephone of the head office and branches： Address of Headquarter in Taipei:No.8, Lane 250, Shinhu 2nd Rd., Neihu District, Taipei City, Taiwan, R.O.C. Tel: (02)2792-8788

Address of Hsinchu Office：6F-9, No.8, Zihciang S. Rd., Jhubei City, Hsinchu County 302, Taiwan, R.O.C.

Tel: (03)657-8328

Address of Taichung Office: 5F-5, No.218, Sec. 1, Wenxin Rd., Nantun District, Taichung City 408, Taiwan, R.O.C.

Tel: (04)3502-8889

Address of Kaohsiung Office: Rm. A3, 14F, No.502, Jiuru 1st Rd., Sanmin District, Kaohsiung City 807, Taiwan, R.O.C.

Tel: (07) 380-1698

• III. Name, address, website, and telephone number of the stock transfer agency,

Name: Taiwan Securities Co., Ltd.

Address: B1, No.96, Sec. 1, Jianguo N. Rd., Jhongshan District, Taipei City 104, Taiwan (R.O.C.) Tel: (02)2504-8125

Website: http://www.taishinbank..com.tw

• IV. Name of the CPA and the accounting firm for financial statements in the most recent year: Name of CPA：CPA Chen, Chin-Chang, CPA Yi-Fan Lin

• Accounting firm name: PricewaterhouseCoopers Taiwan

Address：27F., No.333, Sec. 1, Keelung Rd., Sinyi District, Taipei City 110, Taiwan (R.O.C.) Tel: (02) 2729-6666

Website: http://www.pwc.com/tw

• V. Name of overseas stock exchange and method for accessing information on overseas negotiable securities: None.

• VI. Company Website: http://www.zenitron.com.tw

Table of Contents

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I. Letter to Shareholders (I) 2020 Business Report ·············································································· 1 (II) 2021 Overview of Business Plan ································································ 1 II. Introduction to Company (I)Date of Establishment ············································································ 12 (II) History ···························································································· 12 III. Corporate Governance Report (I) Organization Structure������������������������������������������������������������� 17 (II) Directors, (Including independent directors), General Manager, Deputy General Manager, Associates, Departments and Branches Officer Information ····················· 20 (III) Implementation of Corporate Governance ················································ 31 (IV) Information on CPA Professional Fees��������������������������������������������64 (V) Information on Replacement of Certified Public Accountants�����������������������65 (VI) If the chairman, general manager, or manager in charge of financial or accounting matters of the Company has worked in the firm of the certified public accountant or its affiliates within the last year, the name, title, and period of employment in the firm of the certified public accountant or its affiliates should be disclosed���������������������������������������������������������������65 (VII) 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 during the Most Recent Year or During the Current Year up to the Date of Publication of the Annual Report���������������������������������66 (VIII) Information on the Relationship between any of the top Ten Shareholders (Related Party, Spouse, or Kinship within the Second Degree)����������������������67 (IX) The number of shares held by the Company, its directors, supervisors, managers and businesses directly or indirectly controlled by the Company in the same re-invested business and the consolidated percentage of shareholding are calculated as follows��������������������������������������������������������������70 IV. Capital Overview (I) Capital and Shares ················································································ 71 (1) Source of Capital ··········································································· 71 (2) Relevant Information for Shelf Registration Form ··································· 76 (3) Status of Shareholders····································································· 76 (4) Shareholding Distribution Status ························································ 77 (5) Major Shareholders ········································································ 77 (6) Market Price, Net Worth, Earnings, and Dividends per Share for the past two years ························································································ 78 (7) Dividend Policy and Implementation Status ··········································· 78 (8) The effect of the proposed gratis stock allotment at the shareholders’ meeting on the Company’s operating results and earnings per share ··················· 80 (9) Bonuses of Employees, Directors and Supervisors ··································· 80 (10) Buyback of Treasury Stock ····························································· 80 (II) Corporate Bond ·················································································· 81 (III) Preferred Shares ················································································ 81 (IV) Issuance of Overseas Depositary Receipts ················································· 81

(V) Employ Stock Warrants ········································································ 81 (VI) New Restricted Employee Shares ···························································· 81 (VII) Issuance of New Shares for Acquisition or Exchange of Other Companies’ Shares ···························································································· 81 (VIIII) Implementation of capital utilization plan ··············································· 81 V.Operations Profile (1) Business Content ················································································· 82 (II) Market and Production and Sales Overview ················································ 94 (III) The number of workers, average years of service, average age and education distribution of employees in the industry for the last two years and as of the printing date of the annual report ··························································· 100 (IV) Environmental Expenditure Information ·················································· 101 (V) Labor relations ·················································································· 102 (VI) Important Contracts ··········································································· 104 VI. Financial Information (I) Condensed Balance Sheet and Income Statement in the Past Five Years ··············· 105 (II) Financial analysis for the past five years ···················································· 110 (III) Supervisors’ /Audit Committee’s Report for the Most Recent Year ·················· 115 (IV) Recent Annual Financial Statement ························································ 116 (V) Individual Financial Statement Audited and Certified by Accountants during Recent Year ···················································································· 176 (VI) If the Company and Its Affiliates Encounter Any Financial Difficulties in the Past Year and as of the Date of Publication of the Annual Report, the Impact on the Company’s Financial Status Shall Be Listed ········································· 243 VII. Review of Financial Conditions, Financial Performance, and Risk Management (I) Financial Status ·················································································· 244 (II) Financial Performance ········································································· 245 (III) Cash flow ······················································································· 246 (IV) The impact of major capital expenditure in the last year on the financial business ························································································· 246 (V) Re-investment policy, major reason for profit/loss of the last year, improvement plan and the investment plan for the coming year ········································ 247 (VI) Analysis and Assessment on Risk Matters ················································· 247 (VII) Other Important Matters ····································································· 250 VIII. Special Disclosure (I) Summary of Affiliated Companies ···························································· 251 (II) Private Placement Securities during the most recent fiscal year as well as the current fiscal year up to the date of publication of the annual report����������������257 (III) Holding or Disposal of the Company’s Shares by Affiliated Companies during the most recent fiscal year as well as the current fiscal year up to the date of publication of the annual report��������������������������������������������������257 (IV) Other Necessary Supplementary Notes ···················································· 257 IX. In the event of any matter which has had a significant impact on shareholders rights or the price for the securities referred to Article 36, paragraph 2, subparagraph 2 of the Securities and Exchange Act during the most recent fiscal year as well as the current fiscal year up to the date of publication of the annual report ························ 257

I. Letter to Shareholders

(I) The 2020 Business report.

• (1) Implementation results of business plan

Consolidated revenue has reached NT$34,401,169 thousand in 2020, an increase of NT$7,408,300 thousand and a growth rate of 27.45% over NT$26,992,869 thousand. Net income before tax in 2020 was NT$555,056 thousand, an increase of NT$247,629 thousand and a growth rate of 80.55% over NT$307,427 thousand in 2019.

2. Budget execution status

Financial forecast for 2020 is undisclosed so there is no budget execution status available.

1. Analysis of financial income and expenditure and profitability 2020:

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(Consolidated)
Year Financial Analysis
Items of analysis 2019 2020
Debt to assets ratio 69.03 75.10
Financial The ratio of long-term funds
Structure (%) to property, plant and 1,022.64 1,147.03
equipment
Return on asset (%) 2.48 3.39
Return on equity (%) 5.25 10.25
Ratio of Pre-tax Profit to
Profitability
Paid-in capital (%) 14.37 25.95
Profit ratio (%) 0.85 1.37
Earnings per share (NT$) 1.08 2.21
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(II) 2020 Business Plan Overview

• A. Operating policies

• (1) To plan the mid/long-term development strategy, aiming for continuous growth of company profit and sustainability of operation.

• (2) To Create the maximum value of semiconductor component distributors in the supply chain and establish and operate long-term customer-supplier relationships.

• (3) To build a harmonious labor-management relationship and create a win-win situation for employees and the company.

• B. Expected sales volume and its basis:

The future growth of the semiconductor industry globally is estimated to be 6.2% annually.

Under the continuous impact of the epidemic in 2020, the end consumer market has been

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significantly affected, and overall demand has fallen sharply. Benefited from IC inventory replenishment and the COVID-19 pandemic, it has promoted the growth of remote applications, boosted 5G infrastructure and demand of high-performance computing (HPC), notebook and so on. World Semiconductor Trade Statistics (WSTS) organization predicts that the global semiconductor market (including memory) in 2020 is expected to grow by 3.3%, reaching 426 billion US dollars. Almost every industry has been severely hit by the impact of the COVID-19, and only the semiconductor industry can maintain growth. Looking forward to 2021, HPC, 5G and AI will become the three major growth drivers. WSTS predicts that the global semiconductor industry will grow by 6.2% annually.

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The new normal life in the era of COVID-19 epidemic will continue to drive remote business opportunities. With continuous increase of Stay-at-Home economy and medical demand, in addition to the gradually mature of 5G communication applications in 2021, remote business opportunities shall sustain, as well as online working, learning, shopping and other behaviors shall become the norm. Coupled with the fever of stay-at-home economy products such as Chromebooks, the momentum is expected to continue into the first quarter of 2021.

In response to the epidemic, the reduction of personnel flow and contact needs will further catalyze the development of IoT technology. Within this technology, related IoT devices used for manufacturing, medical monitoring, and service reception are the main growth drivers. Related IoT devices will integrate AI computing, image recognition, high-speed transmission and other hardware collocations based on requirement of users and environments; in addition, functions such as Always On and gesture operations will become another development focus, with related semiconductor processing efficiency, Netcom integration, and power consumption for higher request.

The development direction that major manufacturers are actively trying to achieve currently is

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multi-computing architecture (such as multi-core or CPU+GPU+ASIC). Through the optimal work distribution of multi-variable computing, while accomplishing the computing requests and at the same time to meet the power consumption limit. With the continuous development of emerging applications, the computing ability and low power consumption of ASICs (Application Specific Integrated Circuits) in specific applications are the focus of the application of multiple computing architectures, attracting investment from many companies and startup teams, and will drive changes in the industrial structure.

In 2020, driven by the demand for 5G communication technology and HPC high-efficiency computing, the semiconducting industry will have a substantial growth, driving the advanced process of foundry and the demand for high-end wafer packaging and testing. By the proliferation of networking applications drives, IC designs will fuel the future growth of the Netcom applications and automotive chips.

In 2021, global 5G innovation application cases will increase. Due to the technical limitations of the 4G applications in IoT in the past, the development of large-scale IoT systems (especially industrial IoT systems) is limited. With the help of new connectivity capabilities, 5G allows developers and consumers to combine many different devices and sensors into a large-scale system, even covering the entire city. It gradually will make smart cities realizable, not just a vision. 5G used in the Internet of Things system, its data processing capabilities will be improved, and so to assist in detecting and preventing dangerous situations, and manage complex supply chains.

5G will dominate the market by vertical fields, and a wide range of vertical application fields will become 5G killer applications (smart health, smart transportation, etc.), rather than being completely driven by technology to dominate the market. The application transformation driven by industry demand can improve WiFi problems, including: (1) Information security; (2) Performance: interference, capacity, etc.; (3) Mobility: Among them, the 5G O-RAN is conducive to digital integration (IT+CT+OT) as well as AR and VR applications. Through the integration of virtual reality to assist smart manufacturing to reduce error rates and highly integrated Video as IoT Sensor to completely change the safety mechanism, move towards smarter manufacturing and improve the accuracy of Autonomous Guided Vehicle (AGV)

The semiconductor market of non-3C application grows year by year

In 3C applications, the market share of semiconductor applications for consumer electronics and computer applications continues to decline from 52.4% in 2013, and is expected to fall to 44.0% by 2021. On the other hand, the share of semiconductor applications for communication applications is showing an increasing trend.

The market for semiconductors for non-3C applications is growing year by year. Automotive and industrial semiconductors have continued to grow in recent years thanks to the development of smart and automated products; due to the impact of the epidemic in 2020, and the increase demand for computers and consumer electronics, it shows a slight proportion decline.

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The global semiconductor market is dominated by IC chips, of which Memory has the highest proportion.

The global semiconductor market is dominated by IC chips, accounting for more than 80% of the overall market; optoelectronic semiconductors are the second.

Memory ICs have benefited from their risen prices caused by the increased demand in recent years, and they belong to the category of the highest output value together with Logic IC. In 2018, the proportion has increased significantly due to the increase in mobile phone memory capacity, the demand for mining machines and the launch of 4K TV.

The proportion and output value of Analog and Logic, except for the impact of memory in 2018, mostly show a steady growth trend.

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The time for the market to recover depends on the situation of pandemic control. If the pandemic can be significantly controlled when the vaccine launches in the market, the overall semiconductor market is expected to resume growth momentum in the second quarter of 2021.

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If the US government strengthens the scope of export controls on Huawei, it will have a short-term impact on Taiwan’s semiconductor industry. However, Taiwan’s manufacturers will be able to resume their growth momentum by shifting their market share in the long run.

In the past few decades, the development of the global semiconductor industry was mainly led by PCs, NBs, wireless communication products, and cloud computing, and the industry evolution will be carried on in the future. However, due to the epidemic in 2020, various countries and cities were partially or completely blocked, so the risk of individual unemployment and corporate bankruptcy has increased rapidly, resulting in a sharp drop in the demand for non-essential consumer electronic products.

Although the work, living habits, and consumer behavior have been impacted by COVID-19, and the industries in relation to electronics as well as corporates of component and assembly have been affected, new demands are at the same time generated as well. Including,

Epidemic prevention medical equipment: respirator, forehead thermometer, ear thermometer, blood oxygen machine

Government expenditure: 5G infrastructure (base stations, small base stations, optical fiber networks)

Stay-at-Home economic consumption expenditure: ultra-large data centers, servers, solid state drives, game consoles, head-mounted devices, smart watches, true Bluetooth wireless headsets Online office teaching hardware: NB, Chrombook, Surface

The descriptions in several important application markets are as follows

a. Handheld Devices (including cellphones, smart watches and bracelets, etc)

According to the report of Topology Research Institute, in 2020, affected by COVID-19, terminal consumption is sluggish and smartphone shipments have declined for two consecutive years. Looking forward to 2021 while the epidemic slows down, the economy recovers and the base period is low, smartphones will resume back to its growth track, with an annual increase of 9%. In 2020, the penetration rate of 5G mobile phones will increase from 1% to 19%, and is expected to reach 38% in 2021. In 2020, Huawei and Apple have occupied more than 60% of the market, but in 2021, Xiaomi, OPPO and vivo will supplement the legacy of 5G mobile phone market share from Huawei.

Due to the sluggish growth of smart phones, brand manufacturers have begun to attempt versatility of product layouts, including smart watches/bands, TWS Bluetooth phones, AR/VR devices, and other emerging products that can be used as extensions of smart phone functions. For example, smart video can be transferred to the AR/VR device, and then equipped with functions such as motion tracking operation; the audio can be extended to the TWS Bluetooth headset, and can be used with the voice assistant to connect various functional applications; the smart watch/band can handle the message notification from smart phone, as a device for physiological data sensing and collection.

Therefore, even when the overall wearable device market in 2020 were hit by COVID-19, but with the increased investment of brand manufacturers, the overall market can still maintain an upward growth megatrend. It is estimated that smart bracelets will increase by 3% to 82.9 million in 2020, while smart watches will grow 30.2% reached 78.9 million. The reason why the growth rate of smart bracelets is lower than that of smart watches is not only the higher base period, but also the fact that when manufacturers increase their investment in this industry, they are less likely to choose smart bracelets because of their lower prices and limited functionality. Mostly market target will be development of smart watches. Therefore, although the existing brand manufacturers in the market continue to launch low-priced bracelet products, they are more focused on watch products. New entrants will also use the smart watch market as the main entry point, leading to the prosperous growth of smart watch market in 2020.

b. Computer and its peripherals (PC including desktop and traditional notebook)

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Market research agency Canalys recently released a PC market outlook report, pointing out that global PC shipments have continued to increase since the second quarter of 2020. It is expected that total shipments in 2020 will reach 458 million units, an annual increase of 17%; it is worth mentioning, due to the impact of the epidemic, the demand for desktop replacement from enterprises and education has greatly reduced, causing desktop shipments in 2020 to decline by 23.1%. Looking ahead to 2021, Canalys prdicts to continue to benefit from nonstop growth of laptops, global PC shipments will increase by 1.4% annually and reach 464 million units.

Looking back at the global PC market in 2020, Canalys survey shows that, benefiting from remote business opportunities, the global demand for laptops and tablets has grown rapidly, which has boosted overall sales of PC. By the fourth quarter of 2020, PC shipments (including desktops, laptops, and tablets) are expected to reach 143 million units, an increase of 35% over the same period last year; and overall PC shipments in 2020 are expected to reach 458 million units, an annual increase of 17%.

Among them, due to the strong demand for remote work and learning, notebook shipments in 2020 are expected to reach 241 million units, an increase of 27.9% compared to 188 million units last year; while tablet shipments will reach 156 million units, an increase of 26.5% compared to 123 million units last year.

However, compared to the sharp growth of laptops and tablets, the sales volume of desktop computers this year has become very bleak. The overall shipment volume in 2020 is estimated to be around 60 million units, which is a drop of 23.1% compared to 79 million units last year; mainly due to the impact of the epidemic, the demand for desktop replacements from enterprises and education has greatly reduced.

Looking forward to 2021, Rushabh Doshi, Canalys Research Director, said that there will be four major trends that will continue to drive overall PC growth, namely remote work, digital learning, device as a service, and emerging application cases. With the advent of vaccines and the post-epidemic era, companies and consumers will pay more attention to the use of PCs. There will be many new opportunities not only in hardware but also in software and services. Companies will formulate flexible and active remote work policies for employees, and this requires efficient and safer PC products, especially in the financial industry and government public sectors. Therefore, Canalys predicts that under the constant demand for remote work and learning, the growth power of PC will last until 2021. Notebook shipments will continue to grow, but the strength will slow down and the annual growth rate will shrink to 3.3%; However, driven by laptops, global PC shipments are expected to continue to grow in 2021, with an annual increase of 1.4% to about 464 million units.

• c. Consumer Electronics

Consumer electronic products refer to electronic products used by consumers in daily life, and they belong to specific household appliances, containing electronic components. They are usually used for entertainment, communication, and clerical purposes, such as audio equipment, televisions, DVD players and even electronic clocks. An important feature of consumer electronics products is that they tend to lower their prices over time. Due to the efficiency of manufacturers and the improvement of technology, consumer electronics products can continue to be innovative.

The COVID-19 in 2020 has drastically changed the lifestyles of human beings around the world. The habits of going to work, school, consumption, and traveling have been forced to change from traditional basis as people movement. Under the new normal living conditions brought about by the impact of the epidemic, people, isolated at home, have gradually experienced more convenience, energy saving and higher security that brought by smart home devices. The

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stay-at-home economy is on the rise, and features such as energy saving, automation, convenience, health promotion, and affordable prices will be the key to the continued growth of the smart home IoT device market.

According to Guidehouse Insights, despite the impact of the epidemic on the global economy, the smart home device market remains basically stable, as many consumers continue to purchase smart home devices that can improve their lives and provide added value. However, he also reminded that the side effects of the economic downturn brought about by the epidemic will still affect the consumer market to some extent, including large-scale unemployment, which will cause the overall market growth to be at a standstill in the short term.

However, Strategy Analytics predicts that the overall market is expected to gradually recover ever since 2021, and related consumer spending will reach US$62 billion and grow to US$88 billion in 2025 with a CAGR of 15%. The report pointed out that the overall market is mainly supported by smart thermometers, smart surveillance cameras, smart doorbells, smart sensor lights, etc. that are easy to install, can be purchased online and delivered to your home. In contrast, demand of smart home devices that are more complex and require professional installation has declined, because during the epidemic, people still have concerns about contact with outsiders or even living in the same space. It is expected that the overall market will not return to normal until 2023 or beyond. Bill Ablondi, Director of Strategy Analytics’ Smart Home Strategies team, pointed out that surveys of consumers and suppliers show that some smart home devices have increased demand due to the epidemic, such as security surveillance cameras, smart doorbells, smart thermometers, etc., especially for younger people with the most willingness to purchase.

d. Telecom&Communication

• Market Intelligence & Consulting Institute (MIC) looks forward to the development of the worldwide communications industry in 2021, and anticipates that the four major markets of "consumer end (such as smartphones)", "5G telecommunication network", "enterprise network" and "data center" will fuel the growth of the global communications market in 2021, with an estimated output value growth of 8.1%, reaching US$613.3 billion, of which mobile devices account for about 70%. Global shipments of smartphones were hit by the epidemic in 2020 but is expected to grow by 9% in 2021, with shipments reaching 1.35 billion units. For 5G mobile phones, shipment output was 230 million units in 2020, with a penetration rate of 18.4%, of which mainland China accounts for more than 60%. The top three brands of 5G mobile phones are Huawei (33%), Apple (31%) and Samsung (13%), and it is estimated that 5G mobile phone shipments will reach 540 million units in 2021, with an annual growth rate of 136%. There are three significant trends in the communications industry in 2021.

The first is smart phones. When the United States continues to tighten controls on Huawei and after Huawei loses the mobile phone market, a new world will inevitably emerge. Market Intelligence & Consulting Institute (MIC) stated that the key point will be whether Apple actively develops low-priced models. If Apple supports China's local supply chain, this will have a partial negative impact on the revenue performance of Taiwan's mobile communications industry. On the other hand, as continuous upgrade of product functions and software/hardware specifications with 5G support on large bandwidths, screens, lenses, artificial intelligence and so on, Taiwan's communications industry in 2021 can still look forward to the business opportunities brought by the wave of 5G replacement. The second key is the South Korean 5G commercial enlightenment, which will become an important reference for domestic telecom companies. According to MIC, since its commercialization in April 2019, South Korean telecom companies’ ARPU has performed better than the 4G era, and even turned positive from negative. 5G will be beneficial to telecom operators’ revenue, and 5G applications provided by telecom companies such as

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high-quality AR/VR audio and video and cloud game services stand for the opportunity to bring higher traffic and service volume than 4G for the users. In addition, European and American mobile telecommunications companies will accelerate the construction of 5G networks in 2021, broadcasting themes such as open networks, private networks, and marginal computing. The promotion of market enthusiasm will be another focus of 5G. The third key is the field of Netcom. The observatory focus is that fixed-line service providers continue to expand the construction of FTTH networks, promote 1Gbps+ home services, and introduce a new generation of 10G PON networks; in addition, the 25G optical fiber field are driven by 5G networks, and the demand for related Netcom equipment of future enterprises and data centers is expected to have positive performance.

e. Industrial Electronics

The output value of Taiwan's industrial computers in the first three quarters of 2020 was about 26 billion, a 2.7% decline compared to 2019. This was mainly due to the shortage of components and unsatisfactory logistics caused by COVID-19, as well as project development delays. Furthermore, the overall economic environment is declining, and manufacturers are more conservative and cautious, all have resulted that orders for industrial computers are limited. However, from the demand side, in response to epidemic prevention and medical needs, the promotion of temperature detection systems, respirators and medical equipment, etc., is expected to reach NT$35.4 billion in 2020.

Looking forward to 2021, although the global economy still takes time to recover, as order delays ease, countries increase investment in public infrastructure to revitalize the economy, and the new normal life was brought about by COVID-19, the pace of digital transformation of vertical applications will be driven. For example, the implementation of smart manufacturing in the manufacturing industry can improve its "survival resilience." In the retail industry, in response to the "non-contact" interactive situation, digital transformation is imperative. The logistics industry increases the demand for AMR/AGV to reduce human dependence. To revitalize the economy, countries increase public infrastructure budgets. There is the opportunity to grow for Taiwan’s industrial computer output, and to usher in new business opportunities by taking advantage of the Internet of Things and AI technology development.

f. Automotive Electronics

According to Topology Research Institute, with the gradual recovery of global consumer market demand, global automobile shipments are expected to reach 83.5 million in 2021. In the fourth quarter of this year, major automobile corporates and Tier 1 companies began stock replenishment, which in turn led to an increase in demand for automotive semiconductors. It is estimated that the global automotive chip production value in 2020 will reach 18.67 billion U.S. dollars; in 2021, it will increase to 21 billion U.S. dollars, with an annual growth rate of 12.5%. In 2020, the automotive chip market has been hit by China-US trade frictions and the epidemic. In addition to the supply side, factories have been shut down due to the impact of the epidemic since the beginning of the year. On the demand side, the people's willingness to buy vehicles has been greatly reduced due to home quarantine and other related policies. The disconnection of the supply chain also makes international automotive manufacturers postpone the launch of new cars on the market, which in turn has a significant impact on the automotive market.

Even though the automotive market is facing severe challenges, the major automotive semiconductor corporates still actively develop and expand the automotive chip market. The main reason is that the verification time of newly developed automotive chips is longer, and specifications of certification vary among each automotive manufacturer to be fulfilled. If it can

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be deployed in advance, there will be the opportunity to enter the supply chain of new vehicles to be released after 2023. For example, NXP has cooperated with Taiwan Semiconductor Manufacturing Company (TSMC) for 5nm automotive processors; STMicroelectronics (ST) and Bosch are in cooperation to develop automotive microcontrollers; After the acquisition of Cypress by Infineon, Cypress's automotive NOR Flash and microcontroller (MCU) have strengthened the integrity of Infineon's automotive-related solutions.

In all, telematics, ADAS, self-driving cars and electric vehicles have become irreversible development trends in the automotive industry, and they are also such a significant factor to driving the growth of automotive semiconductors. Whether they can succeed in the market in the future will depend on the speed of introduction of advanced processes and mastery of the production capacity of automotive power semiconductors. Topology Research Institute also specifically pointed out that the current global semiconductor industry is limited by the shortage of fab capacity, and if the shortage of goods cannot be resolved in the short term, it is expected that the automotive industry will also face a similar situation. Therefore, IDM manufacturers who has its own fab will have a greater competitive advantage in the automotive market

• 3.Significant Marketing Policies

• (1) Focus on application areas of seven major products

• Facing the increasingly fierce competition in the electronics industry, Zenitron is committed to becoming a "value-added supplier of application design solutions." We strengthen our own research and development capabilities, break away from the trading of traditional components, provide customers with overall solutions, speed up the time for customers to launch their products, and create irreplaceable value. In order to match the solution-oriented marketing mode, the Company integrated the existing marketing team and also commit to training FAE and R&D designers. Currently effectiveness through hard work of application design solutions has gradually shown, and specific solutions in seven areas such as, “handheld devices”, “computers and peripherals”, “power management”, “consumer electronics", "communication and network", "industrial power supply", and "automotive electronics". In addition to focusing on the integration of existing agency line products, we also set up a market development department to actively seek new agency lines to strengthen the competitiveness of various solutions.

• (2) Continue to expand product line

• In response to the epidemic, the reduction of personnel flow and contact needs will further catalyze the development of IoT technology. Within this technology, related IoT devices used for manufacturing, medical monitoring, and service reception are the main growth drivers. Related IoT devices will integrate AI computing, image recognition, high-speed transmission and other hardware collocations based on requirement of users and environments; related functions to the processing performance of related semiconductors, Netcom integration, and power consumption are with higher requirements. Therefore, no matter from the upstream chip to the downstream end product, cloud big data, 5G transmission, data center and artificial intelligence will be the focus of future development. The company also focuses on key applications and expands its agent product line to provide better services.

• (3) Strengthen FAE technical support and capabilities of design and development, and focus on solution and marketing strategies

• It is the company's business strategy to become a " value-added distributor with leading technology". Therefore, mastering new technologies, training professional R&D talents, and developing high-quality application design solutions are important goals for the company's talent cultivation. By providing solutions, customers’ research and development costs and time can be reduced, also customers’ loyalty can be cultivated so as to widen the gap with competitors. On the other hand, the development of its own technology will help the company

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strive for new product agency rights and strengthen the competitiveness of its product line.

• (4) Cooperate with IC Design House to develop new products

• Semiconductor component distributors are the bridge between the upstream IC Design House and the downstream system factories. They grasp first-hand market information and can provide reference for upstream suppliers in product development and marketing. The company has established further partnerships with IC Design House at home and abroad, actively participated in the development of new products, and sold through the company’s channels to create a win-win situation.

• (5) Establish strategic alliances to increase product agency opportunities

• The company is also constantly seeking business opportunities in new markets to increase its competitive advantage. In the long run, the main core of the focus of company’s development will still be the semiconductor component channel. In the future, Company will focus on its own business and extend its investment in electronic channel-related businesses, and master technology and semiconductor industry through investment in upstream IC Design House or strategic alliances with peers. Zenitron increases product agency opportunities, creates revenue growth and profit sources, and expands the service depth of the component channel industry for upstream, midstream, and downstream related manufacturers.

4. Future development strategy

Facing the increasingly fierce competition in the electronics industry, Zenitron is committed to becoming a "value-added supplier of application design solutions". To create irreplaceable value of the Company, we strengthen own R&D capabilities, break away from the trading of traditional components, provide customers with overall solutions, and accelerate customers’ product launches time schedule. To align with the solution-oriented marketing mode, the company not only integrates the existing marketing team but also strives to train FAE and R&D design personnel. The current efforts in application design solutions have gradually shown results in seven major fields including "Handheld Devices", "Computers and Peripherals", "Consumer Electronics", "Communications and Networks", "Industrial Power", and "Automotive Electronics", all with specific program content. In addition to focusing on the integration of existing agency line products, we also set up a market development department to actively seek new agency lines to strengthen the competitiveness of various solutions.

1. The influence of the external competition environment, the legal environment and the overall operation environment

Turbulence can be said to be the best portrayal of 2020. The US-China trade war was in the ascendant before, and the black swan COVID-19 pandemic followed in the next century. The epidemic spread to the world has caused the World Bank to predict that real GDP in 2020 will decline by 4.3 %. The worst times may also be the best times. The remote business opportunities and the demand for terminal products driven by the new normal life after the epidemic, in addition to the 5G construction boom, caused many industries to operate against the wind. From the perspective of the semiconductor industry, major packaging and testing factories are actively investing in capital expenditures, foundry capacity continues to be fully loaded, and IC design is boosting alive when the global supply chain and the transportation industry resumes.

The COVID-19 epidemic has prompted companies to accelerate the pace of digital transformation. As an important information infrastructure, Netcom and computing industries are also enjoying their prosperity. Products and services such as the Internet of Things, cloud computing and industrial computers focus on smart healthcare, edge computing, and remote non-contact to improve corporate resilience and technology of survival flexibility and scenario mining. If it extends further from the enterprise to the public, the momentum of Work-From-Home (WFH) and Stay-at-Home economy will boost the demand for smart

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terminals, and the demand for related products such as TVs, speakers, watches, laptops, etc. will rebound in the second half of 2020. The volume of goods is therefore showing a growth trend, and to a certain extent, it has also increased the shipment of IT panels.

Looking forward to the dawn of epidemic prevention in 2021, relevant remote, non-contact, AI, image recognition and other technical tools will take 5G and the Internet of Things as the key to development, and then further deepen the integration with industry, medical, and Internet of Vehicles. The application scenarios of the company have spawned business models and industrial forms. For example, smart medical care will focus on remote medical care, wearable devices and status tracking, making detection capabilities and accuracy the key to products. On the other hand, the growth momentum of smart life comes from automated comfort, home safety, and environmental sanitation monitoring. As the demand for smart terminals has not faded, in addition to the health application physiological data measurement re-emphasized due to COVID-19, and new products that are expected to be released as well as international games and activities with one-year postponement and so as other issues to enable various products to maintain their outstanding performance in 2021. In view of 5G communications, consumer electronics, and the expected recovery of the automotive market and mobile phone consumption power, the demand for upstream key components as IC design, packaging and testing, and foundry of semiconductors can be cautiously optimistic. Overall, the business opportunities derived from the post-epidemic era not only affect the development trend of the industry, but also change the lifestyle of consumers. Through the trials and tribulations in 2020, companies and consumers believe that in 2021, they will be able to face the epidemic more positively, diversified, and actively, and based on the new normal, after a storm comes a calm, to welcome the recovery of the industry.

Chairman: CEO: Accounting Representative:

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II. Introduction to Company

(I) Date of Establishment: October 6, 1982

(II) History:

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October 1982 Established in Taipei City with a capital of NT$2.5 Million.
January 1983 Acted as the agent of semiconductor electronic components for JP ROHM
CO.,LTD.
May 1983 Acted as the agent of TOWA ELECTRON CO.,LTD for electronic
components; the company was the subsidiary invested by subsidiary of
Fujitsu Limited in Japan, renamed as FUJITSU MEDIA DEVICES LTD
currently, specialized in Tantalum capacitors and electrolytic capacitors.
July 1984 Office was established in Kaohsiung.
March 1985 Acted as the agent of FUJI ELECTRIC CO., LTD for semiconductor
electronic components.
September 1985 Proceeds from New Issues to NTD5 Million.
March 1986 Acquired position of General Agent in Taiwan with INTERNATIONAL
RECTIFIER (the company is the largest manufacturer of POWER
MOSFET globally), the company merged with INFINEON today.
September 1987 Acted as the agent for semiconductor electronical components of
LINFINITY MICROELECTRONICS and now this company has merged
with Microsemi today.
July 1988 Proceeds from New Issues to NTD12 Million and was reorganized to be
ZENITRON CORPORATION.
March 1989 Purchased an office in Ruixing Building, 11F-2, No. 112, Sec. 2,
Chongshan N. Rd., Taipei City, Taiwan, R.O.C.
July 1991 Proceeds from New Issues to NT$15 Million.
October 1993 Capital increase in cash to NT$25 Million and annual sales income
NT$410 Million.
November 1995 Capital increase in cash to NT$28 Million and annual sales income
NT$930 Million.
June 1997 Proceeds from New Issues to NT$58 Million.
November 1997 Proceeds from New Issues of NT$50 Million and capitalization of
retained earnings NT$29 Million; capital reached NT$137 Million and
annual sales turnover reached NT$1,550 Million, a growth of 70%.
March 1998 Xinchu office was established.
June 1998 ZENITRON�H.K.�LIMITED was established with 100% shares holding.
August 1998 Proceeds from New issues to NT$197 Million.
November 1998 Reinvested in RAYTRONIC CORPORATION holding 93.75% shares
and 100% shares today.
April 1999 Proceeds from New Issues to NT$139 Million and capitalization of
retained earnings NT$59.1 Million, where capital reached NT$360
Million with shares issued in public.
November 1999 Proceeds from New Issues to NT$40 Million, where capital reached
NT$400 Million and total sales turnover reached NT$3,500 Million.
February 2000 Procured a land in Neihu (1,520.760 square meters approx) for
construction of plant & office buildings.
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April 2000 Procured a land in Neihu (1216.608 square meter approx) for construction
of plant & office buildings.
May 2000 Capitalization of retained earnings NT$120 Million and capitalization of
employee bonus NT$10 Million, where capital reached NT$530 Million.
October 2000 Listed in Taipei Exchange for trades.
April 2001 Proceeds from New Issues to NT$100 Million, where capital reached
NT$630 Million.
July 2001 Capitalization of retained earnings NT$159 Million and Capitalization of
bonus for employee NT$11 Million, Capital reached NT$800 Million.
August 2001 Reinvested in SUPERTRONIC INTERNATIONAL CORP. with 100%
shares holdings.
March 2002 The Board of Directors passed a resolution of merging and acquisition
with ARTEC INTERNATIONAL CO., LTD.
March 2002 The Board of Directors passed a resolution of issuing the first unsecured
convertible bonds domestically on March 21.
April 2002 Acted as the agent of products for CSR and PIXELWORKS.
June 2002 Entered into a memorandum of construction of Neihu Technology
Building.
August 2002 Proceeds from issue of new shares due to merger to NT$13,306,660.00,
Capital reached NT$813,306,660.00.
Company stock was converted to Taiwan Stock Exchange for trades.
October 2002 Capitalization of retained earnings NT$97,596,800.00 and capitalization
of bonus for employee NT$11,000,000.00, Capital reached
NT$921,903,460.00.
December 2002 Reinvested in Cordial Investment Corporation with 100% shares of
holdings.
May 2003 The Board of Directors passed a resolution of issuing the second domestic
unsecured convertible bonds.
June 2003 With capital increase, reinvestment in SUPERTRONIC
INTERNATIONAL CORP. with a total of HKD2.4 Million.
August 2003 Capitalization of retained earnings NT$73,752,240.00 and Capitalization
of bonus for employee NT$12,000,000.00, Capital reached
NT$1,007,655,700.00.
September 2003 With capital increase, reinvestment in SUPERTRONIC
INTERNATIONAL CORP. with a total of USD3 Million.
March 2004 Completion of ZENITRON NEIHU Technology Building.
September 2004 Capital increase by earnings, NT$55,977,530 and by employee bonus,
NT$18,000,000; share capital reached NT$1,089,836,640.
January 2005 Reinvested in NU Inc. with NT$20 Million.
The M&A proposal passed in the Extraordinary Shareholders' Meeting
September 2005 and the base date was December 31, 2005.
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September 2005 Capitalization of retained earnings NT$53,513,700.00 and capitalization
of bonus for employee NT$14,000,000.00, Capital reached
NT$1,227,661,520.00.
April 2006 Employee stock option certificates converted to new proceeds from issue
of 2,475,000.00, Company bonds converted to new proceeds from issue
of 62,524,950.00, merger for new proceeds from issue of 420,358,820.00,
Capital reached NT$1,713,020,290.00.
April 2006 Employee stock option certificates converted to new proceeds from issue
of 950,000.00, Company bonds converted to new proceeds from issue
of 71,436,950.00, Capital reached NT$1,785,407,240.00.
April 2006 The Board of Directors passed a resolution of issuing domestic third
unsecured convertible company bonds.
July 2006 Employee stock option certificates converted to new proceeds from issue
of 1,420,000.00, Company bonds converted to new proceeds from issue
of 30,598,750.00, proceeds from New Issues of NT$200 Million, Capital
reached NT$2,017,425,990.00.
August 2006 Capitalization of retained earnings NT$60,600,000.00 and capitalization
of bonus for employee NT$24,000,000.00; capital reached
NT$2,102,025,990.00.
October 2006 Employee stock option certificates converted to new proceeds from issue
of 3,550,000.00, company bonds converted to new proceeds from issue of
2,695,000.00, capital reached NT$2,108,270,990.00.
January 2007 Employee stock option certificates converted to new proceeds from issue
of 1,350,000.00, Company bonds converted to new proceeds from issue
of 2,364,860.00, Capital reached NT$2,111,985,850.00.
April 2007 Employee stock option certificates converted to new proceeds from issue
of 1,550,000.00, Capital reached NT$2,113,535,850.00.
May 2007 Passed cancellation proposal of the 5th treasury stock with 2,000,000
shares, Capital reached NT$2,093,535,850.00.
July 2007 Employee stock option certificates converted to new proceeds from issue
of 2,550,000.00, Capital reached NT$2,096,085,850.00.
October 2007 Employee stock option certificates converted to new proceeds from issue
of 950,000.00, Company bonds converted to new proceeds from issue of
36,145,530.00, Capital reached NT$2,133,181,380.00.
January 2008 Employee stock option certificates converted to new proceeds from issue
of 9,575,000.00, Company bonds converted to new proceeds from issue
of 2,436,350.00, Capital reached NT$2,145,192,730.00.
April 2008 Employee stock option certificates converted to new proceeds from issue
of 2,850,000.00; cancelled the 6th treasury stock with 4,000,000 shares,
Capital reached NT$2,108,042,730.00.
July 2008 Employee stock option certificates converted to new proceeds from issue
of 3,300,000.00, Capital reached NT$2,111,342,730.00
October 2008 Employee stock option certificates converted to new proceeds from issue
of 275,000.00, Capital reached NT$2,111,617,730.00.
December 2008 Cancelled the 7th treasury stock with 5,000,000 shares, Capital reached
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NT$2,061,617,730.00.
August 2009 Employee stock option certificates converted to 1,050,000.00, Capital
reached NT$2,062,667,730.00.
October 2009 Employee stock option certificates converted to 2,787,500.00, Capital
reached NT$2,065,455,230.00.
January 2010 Employee stock option certificates converted to 15,450,000.00, Company
bonds converted to be 14,456,280.00
Capital reached NT$2,095,361,510.00.
April 2010 Employee stock option certificates converted to 3,545,000.00, Company
bonds converted to be 7,662,960.00
Capital reached NT$2,106,569,470.00.
July 2010 Employee stock option certificates converted to 3,000,000.00, Company
bonds converted to be 3,260,860.00
Capital reached NT$2,112,830,330.00.
October 2010 Employee stock option certificates converted to 1,075,000.00, Company
bonds converted to be 489,130.00
Capital reached NT$2,114,394,460.00.
December 2010 ZENITRON SHANGHAI procured office building with RMB
12,720,794.00.
January 2011 Employee stock option certificates converted to 3,400,000.00, Company
bonds converted to be 1,141,270.00
Capital reached NT$2,118,935,730.00.
April 2011 Employee stock option certificates converted to 1,075,000.00, Company
bonds converted to be 4,565,210.00
Capital reached NT$2,124,575,940.00.
July 2011 Employee stock option certificates converted to 2,095,000.00, Company
bonds converted to be 2,065,200.00
Capital reached NT$2,128,736,140.00.
October 2011 Employee stock option certificates converted to 2,492,500.00, Capital
reached NT$2,131,228,640.00.
January 2012 Employee stock option certificates converted to 475,000.00, Capital
reached NT$2,131,703,640.00.
April 2012 Employee stock option certificates converted to 1,070,000.00, Capital
reached NT$2,132,773,640.00.
August 2012 Employee stock option certificates converted to 750,000.00, Capital
reached NT$2,133,523,640.00.
November 2012 Employee stock option certificates converted to 510,000.00, Capital
reached NT$2,134,033,640.00.
January 2013 Employee stock option certificates converted to 200,000.00, Capital
reached NT$2,134,233,640.00.
April 2013 Employee stock option certificates converted to 592,500.00, Capital
reached NT$2,134,826,140.00.
October 2013 Employee stock option certificates converted to 557,500.00, Capital
reached NT$2,135,383,640.00.
January 2014 Employee stock option certificates converted to 455,000.00, Capital
reached NT$2,135,838,640.00.
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April 2014 Employee stock option certificates converted to 1,205,000.00, Capital
reached NT$2,137,043,640.00.
July 2014 Employee stock option certificates converted to 380,000.00, Capital
reached NT$2,137,423,640.00.
October 2014 Employee stock option certificates converted to 162,500.00, Capital
reached NT$2,137,586,140.00.
March 2015 Employee stock option certificates converted to 412,500.00, Capital
reached NT$2,137,998,640.00.
July 2015 Acted as the agent of semiconductor electronic components for PARADE
TECHNOLOGY, LTD.
August 2015 Employee stock option certificates converted to 250,000.00, Capital
reached NT$2,138,248,640.00.
May 2016 CommonWealth Magazine<2015 Top 2000 Company Survey> listed
ZENITRON Top 61.
May 2017 CommonWealth Magazine<2016 Top 2000 Company Survey> listed
ZENITRON Top 69.
July 2017 Reinvested in ZeniCom (HK) Limited, holding 60% shares; as of now,
holding 100% shares.
May 2018 CommonWealth Magazine<2017 Top 2000 Company Survey> listed
ZENITRON Top 57.
May 2019 CommonWealth Magazine<2018 Top 2000 Company Survey> listed
ZENITRON Top 54.
May 2020 CommonWealth Magazine<2019 Top 2000 Company Survey> listed
ZENITRON Top 60.
November 2020 Awarded in 2020 Global
Distributors Excellence Award by electric industry media, AspenCore.
May, 2021 CommonWealth Magazine<2020 Top 2000 Company Survey> listed
ZENITRON Top 52.
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III. Corporate Governance Report

(I) Organization Structure

1. Organization Chart

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Shareholders’
Meeting
Board of Directors
Remuneration
Audit Committee
Committee
Chairman Office
Market
development
Auditing Office
Market
Communication
CEO Office
Semiconductor Memory General Corporate
Business Group Business Group Management
Business Applied MIS Center Logistics Center Business Applied Human Resource Administration Finance & Operation Legal
Engineering Engineering Accounting Management
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2. Major Corporate Functions

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Department Major Responsibilities
Market (1) Be responsible for review of new agent, new market development and proposal of
development new business rule.
Market
Communication [(1) Be responsible for planning, legal person and public relationship etc. ]
(1) Be repsonsible for audit, coordinatnig with staffs throughout departments duties and
confirming job accuracy.
(2) Be responsible for audit, maintenance, improvement, suggestion for internal control
Auditing Office
system and assist in troubleshooting at all levels, improvement and efficiency.
(3) Urge on rationalization of every process.
(4) Performance assessment at all levels of sectors in the Company.
(1) Organize development, execution, communication and coordination of the
Company's financial structure and sales target.
(2) Be repsonsible for mid/long-term business target planning and development of
CEO Office marketing strategy.
(3) Be responsible for planning of all sales of products by agent, material preparatory
plan, pricing policy, customer service, sales analysis and assessment, product
education and sales business support etc.
(1) Integrate marketing plan, material preparatory plan and pricing policy etc. for all
products via agent.
(2) Set business units for business as follows:
A. Be responsible for sales of motherboard and notebook.
B. Be responsible for sales of computer peripherals, telecommunication appliance
and consumers electronic products.
Business C. Be responsible for sales promotion of monitor, power supply, UPS etc.
D. Be responsible for liaison with domestic distributors, export trade and overseas
subsidiaries.
E. Kaohsiung Office is responsible for sales to all customers in Tainan, Kaohsiung
to Pingtung.
F. Hsinchu Office: Be responsible for sales to all customers in Hsinchu.
G. Taichung Office: Be responsible for sales to all customers in Taichung.
(1) Be responsible for technologic bridging, test and related report making as well as
Applied analysis for all products via agent.
Engineering (2) Application programming increased product compatiability and help customer on
technology troubleshooting.
(1) Be responsible for planning the Company's information system and features,
MIS Center computer and equpment management, as well as hardware, software design,
development, maintenance and data report processing.
(1) Be responsible for managment of exported/imported cargo and warehouse.
Logistics Center (2) Be responsible for assisting sales department in shipment and after-sales services.
(3) Import/export details.
Human (1) Talent management such as recruitment, education and retainment.
Resource (2) Formulation and update of the Company's overall system, rules and measures.
(1) Equipment and asset management throughout the Company.
Administration (2) General administration, routines, receipt/forward, employee catering service and
healthcare.
(1) Be responsible for the Company's analysis, planning and utilization of treasury.
(2) Be responsible for money cashier, deployment and transactions with banks.
Finance &
(3) Investment evaluation/execution/analysis.
Accounting
(4) Operation of derivatives.
(5) Overseas reinvestment and financial management
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Department Major Responsibilities	Department Major Responsibilities
(6) Stock management. (7) Data analysis of operational management (8) Be responsible for accounting, calculation of profit/loss, taxation and operating costs. (9)Be responsible for subsidiaries' financial management & accounting.
Operation Management (1) Integration of operating guideline, analysis on operating statements and suggestions on improvements.
Legal	(1) Management, development, review and affixing seals on diversified contracts for the Company. (2)Execute diversified lawsuit-related affairs for the Company.

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(II) Directors (Independent Director) General Manager, Deputy General Manager, Associates, Departments and Branches Officer Information: (1) Information on Directors (Independent Directors)

Apr. 13, 2021; Unit: shares; %

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Title Registration Nationality Place or Name Gender Elected Date (Years) Term Date First Elected Number of shares Shareholding when Elected Shareholding ratio Number of Current Shareholding shares Shareholding ratio Number of shares Spouse & Minor Shareholding Shareholding ratio Number shares of Shareholding by ArranNominee Shareholding gement ratio Experience (Education) Other Position in the Company and other Companies Executives, Directors or Supervisors who are spouses or within two degrees of kinship Title Name Relation
Chairman of the Board of Directors of the Company
Chairman of ZENITRON (H.K) LIMITED - Corporate
Chairman Taiwan CHOU,YEOU-YIH Male 2018.06.12 3 1982.09.13 5,192,074 2.43 5,192,074 2.43 9,552 0.00 - - Completed MDP class in Asia University College of ManagementDepartment of Electrical Engineering, College of Engineering, Tatung UniversityDirector of Electronic Design, Tatung Co. Representative of ZENITRONChairman of SUPERTRONIC - Corporate Representative of ZENITRONChairman of ZENIBOSS CORPORATIONDirector of Cordial Investment Corporation - Corporate representative of ZENITRONDirector of NU INC. - Corporate representative of ZENITRONDirector of JOYRICH INVESTMENT HOLDING GROUP CO., LIMITED - Corporate Representative of SUPERTRONICDirector of ADLink Technology Inc., I-SHENG ELECTRIC CEO Chief Executive Officer CHOU,CHUN-KUANGCHOU,CHUN-HSIEN and son and son Father Father
WIRE & CABLE CO., LTD., Yutseng Investment Co., Ltd.
Supervisor of Zenitex Investment Co., Ltd.
Vice Chairman of the Company
Department of Electrical Director of ZENITRON (H.K) LIMITED - Corporate
Engineering, College of Representative of ZENITRON
Vice Chairman Taiwan CHEN,HSIN-YI Male 2018.06.12 3 1984.07.01 2,674,390 1.25 2,674,390 1.25 1,092,122 0.51 - - Engineering, Tatung UniversityDeputy Manager of Business Director of ZENITRON (Shenzhen) - Corporate Representative of ZENITRON (H.K) LIMITEDSupervisor of ZTHC (Shanghai) - Corporate Representative of - - -
of BELLMART ZENITRON (H.K) LIMITED
INDUSTRIAL CO., LTD. Zenitron (Shanghai) International Trading Co., Ltd.-Corporate
representative of ZENITRON (H.K) LIMITED
Taiwan Yutseng Investment Co., Ltd. - 2018.06.12 3 2001.04.09 6,090,840 2.85 6,090,840 2.85 - - - -
Directors M.B.A., National Taiwan University Master of Business Administration for Senior Management, Fudan University Master of Communication, Monash University, Melbourne, Australia Chief Executive Officer of our Memory Business GroupChairman of Yutseng Investment Co., Ltd.Director of Zenitex Investment Co., Ltd. Director of RAYTRONIC CORPORATION - Corporate representative of ZENITRONDirector of Zenicom (HK) Limited - Corporate representative of SUPERTRONICSupervisor of ZENIBOSS CORPORATION Chairman CEO CHOU,YEOU-YIH CHOU,CHUN-HSIEN Father and son Brothers
Taiwan Representative: CHOU,CHUN-KUANG Male 2018.06.12 3,430,502 1.60 977,883 0.46
Taiwan Zenitex Investment Co., Ltd. - 2018.06.12 3 2001.04.09 9,862,828 4.61 9,862,828 4.61 - - - -
Department of Computer
Science and Electrical
Directors Engineering, Monash University MS in Telecommunications Engineering, University of Melbourne Entrepreneurial Management Chief Executive Officer of our Semiconductor Business Group Director of Cordial Investment Corporation - Corporate representative of ZENITRON Chairman of Zenitex Investment Co., Ltd. Supervisor of Yutseng Investment Co., Ltd. Chairman CEO CHOU,YEOU-YIH CHOU,CHUN-KUANG Father and son Brothers
Course, National Chengchi
University
Taiwan Representative: CHOU,CHUN-HSIEN Male 2018.06.12 3,557,925 1.66 5,000 0.00 - -
Provincial Taipei Institute of
Technology
Directors Taiwan HSIEH,SHIH-FU Male 2018.06.12 3 1995.11.15 1,770,802 0.83 1,770,802 0.83 144,746 0.07 - - Director of Tatung's TV factory Director of AUSTIN TECHNOLOGY CO., LTD. - - -
General Manager of Tatung
Fuji Electrochemical
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Title Registration Nationality Place or Name Gender Elected Date (Years) Term Date First Elected Number of shares Shareholding when Elected Shareholding ratio Number of Current Shareholding shares Shareholding ratio Number of shares Spouse & Minor Shareholding Shareholding ratio Number shares of Shareholding by ArranNominee Shareholding gement ratio Experience (Education) Other Position in the Company and other Companies Executives, Directors or Supervisors who are spouses or within two degrees of kinship Title Name Relation
Directors Taiwan FANG,YI-HSIUNG Male 2018.06.12 3 2012.06.15 71,867 0.03 71,867 0.03 106,004 0.05 - - Ibiza College of AustraliaEngineering Management Section Director of DRAGONJET CORPORATION and Yisheng Electric Wire Plastic (Kunshan) Co., Ltd. General Manager of I-SHENG ELECTRIC WIRE & CABLE CO., LTD. - - -
EMBA, National Taiwan
University
Master of Business
Administration, Fudan
University
Master of Business
Independent Director Taiwan HSU,JUI-MAO Male 2018.06.12 3 2018.06.12 - - - - - - - - Administration, University of Missouri, USA General Manager, IBT Independent Director/Remuneration Committee of SHINIH ENTERPRISE CO., LTD. - - -
Securities Co., Ltd.
Senior Deputy General
Manager, Industrial Bank of
Taiwan
Deputy General Manager,
CTBC Securities Co., Ltd. CEO of ADLINK Technology Limited
Director of LINK WOW INTERNATIONAL CO., LTD.
Corporation Representative of ADLINK Technology Limited
Director of ADLINK Technology Limited (Hong Kong)
Corporation Representative of LINK WOW INTERNATIONAL
CO., LTD.
Director of ADLINK Technology Limited - Corporat
representative of ADLINK Technology Limited (Hong Kong)
Master of Computer
Management Decision Director of Dongguan Lingyao Electronic Technology Co., Ltd.
Independent Director Taiwan LIU,CHUN Male 2018.06.12 3 2015.06.10 - - - - - - - - Research Institute, National Tsing Hua University Corporate representative of ADLINK Technology Limited (China) - - -
Institute for Information Director of ADLINK Technology Limited
Industry Chairman of Ampro ADLINK Technology Inc. - Corporat
representative of ADLINK TECHNOLOGY INC
Director of ADLINK Technology holding GmbH - Corporat
representative of ADLINK TECHNOLOGY INC
Director of ADLINK Technology GmbH
Director of ADLINK Technology Limited
ADLINK Technology Korea Ltd. - Corporate representative of
ADLINK TECHNOLOGY INC
General Manager of MAYER STEEL PIPE CORPORATION
Department of Accounting, Independent Director of Universal Vision Biotechnology Co.,
Independent Director Taiwan HSIAO,MIN-CHIH Male 2018.06.12 3 2015.06.10 - - - - - - - - Tung Hai University General Manager, MAYER STEEL PIPE Ltd. Director of American Control Development Co., Ltd. Supervisor, MAYER INN CORPORATION. - - -
CORPORATION Director of GRAND TECH PRECISION MANUFACTURING
(THAILAND) CORPORATION
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Apr. 13, 2021

Major shareholders of the juristic persons

Name of Institutional Shareholders Major shareholders of the juristic persons	Name of Institutional Shareholders Major shareholders of the juristic persons
Yutseng Investment Co., Ltd. CHOU,CHUN-KUANG (40.7%), CHOU,CHUN-HSIEN (41%), CHOU,YEOU-YIH (9%), CHOU,LI-MEI-CHEN (9%), FENG,CHIUNG-HUA (0.3%)
Zenitex Investment Co.,Ltd.	CHOU,LI-MEI-CHEN (32.5%),CHOU,YEOU-YIH(32.5%), CHOU,CHUN-KUANG(17.5%),CHOU,CHUN-HSIEN(17.5%)

(2) Information on Directors (Independent Directors)

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Apr. 13, 2021
Meets One of the Following Professional
Qualification Requirements, Together with at
Independence Criteria (Note 1)
Least Five Years’ Work Experience
An instructor A judge, public Has work
Criteria or higher prosecutor, experience
position in a attorney, Certified in the areas
department of Public of
commerce, Accountant, or commerce, The number of
law, finance, other professional law, finance, independent
accounting, or or technical or directors in
other specialist who has accounting, other listed
academic passed a national or otherwise companies
department examination and necessary 1 2 3 4 5 6 7 8 9 10 11 12 concurrently
related to the been awarded a for the
Name business certificate in a business of
needs of the profession the
Company in a necessary for the Company
public or business of the
private junior Company
college,
college or
university
Vice Chairman CHENChairman CHOU,,HSIN-YI YEOU-YIH P PP P P PP P PP PP P PP PP None None
Yutseng Investment Co.,
Directors Ltd. Representative: P P P P P None
CHOU,CHUN-KUANG
Zenitex Investment Co., Ltd.
Directors Representative: P P P P P P None
Independent Directors Directors Director HSIEHFANGHSU,JUI-MAO : CHOU,YI-HSIUNG ,SHIH-FU ,CHUN-HSIEN PPP PPP PPP PPP PPP PPP PPP PPP PPP PPP PPP PPP PPP None None 1
Independent Director LIU,CHUN P P P P P P P P P P P P P 0
Independent Director HSIAO,MIN-CHIH P P P P P P P P P P P P P 1
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Note 1: Please tick the corresponding boxes with “ü” that apply to a member during the two years prior to being elected or during the term(s) of office.

• �1�Not an employee of the Company or any of its affiliates.

• �2�Not a Director or Supervisor of the Company or its affiliates, (however, this does not apply, in case where the person is concurrently working as an Independent Director of the Company or its parent company, subsidiary or subsidiary of the same parent company established according to this Act or local country ordinances).

• �3�Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of 1% or more of the total number of outstanding shares of the Company, or ranking in the top 10 in holdings.

• �4�Not a spouse, second-degree relative or third-degree relative of the managers in (1) or persons in (2) or (3)..

• �5�Not a director, supervisor, or employees of a corporate shareholder that directly holds five percent or more of the total number of outstanding shares of the Company or that holds shares ranking in the top five in holdings or is the representative being assigned as the director or supervisor of the Company by in accordance with Article 27, Paragraph 1 or 2 of the Company Act, (However, this does not apply, in case where the person is concurrently working as an Independent Director of the Company or its parent company, subsidiary or subsidiary of the same parent company established according to this Act or local country ordinances).

• �6�Not a director, supervisor or employee of other company which has over half of the number of directors’ seats or shares with voting rights of the Company and is controlled by the same person (however, this does not apply, in case where the person is concurrently working as an Independent Director of the Company or its parent company, subsidiary or subsidiary of the same parent company established according to this Act or local country ordinances).

• �7�Not a director, supervisor or employee of other companies or institution which concurrently works as or in a spouse relationship to the chairman, general manager or personnel of relative duties of the Company (however, this does not apply, in case where the person is concurrently working as an Independent Director of the Company or its parent company, subsidiary or subsidiary of the same parent company established according to this Act or local country ordinances).

• �8�Not a director, supervisor, manager or a shareholder holing five percent or more of the shares of a company or institution that has a business or financial relationship with the Company, (however, this does not apply, in case where the specific company or institution holds over 20% but less than 50% of the total number of issued shares of the Company and the person is concurrently working as an Independent Director of the Company or its parent company, subsidiary or

-22-

subsidiary of the same parent company established according to this Act or local country ordinances).

• �9�Not a professional who provides auditing, nor a professional who provides commercial legal, financial, accounting, or consulting services to the Company or its affiliates with the cumulated remuneration within the last two years less than NT$500,000, nor is an owner, partner, director, supervisor, or manager, or the spouse of any of the above, of a sole proprietorship, partnership, company, or organization that provides such service to the Company or its affiliates, however, this does not apply for members of compensation committee, public acquisition audit committee or special committee for merger who exercise power in accordance with relevant laws and regulations in Securities and Exchange Act or Business Mergers and Acquisitions Act.

• �10�Not a spouse or relative of second degree or closer to any other directors.

• �11�Not been a person of any conditions defined in Article 30 of the Company Act.

• �12�Not elected as a governmental, juridical person or its representative defined in Article 27 of the Company Act.

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(3) General Manager, Deputy General Manager, Associates, Departments and Branches Officer:

Apr. 13, 2021; Unit: shares; %

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Shareholding by
Title Nationality Gender Name Date of Taking Office Number Shareholdings Shareh Spouse & Minor Number Shareholdings Share Number ArrNominee angeSharehoment Experience (Education) Other Position in other Companies Managers who are spouses or within two degrees of kinship
of shares olding of shares holdin of lding Title Name Relation
ratio g ratio shares ratio
Director of Zenicom (HK) Limited - Corporate
M.B.A., National Taiwan University representative of SUPERTRONIC
Senior Auditor at Supervisor of RAYTRONIC CORPORATION -
PricewaterhouseCoopers Taiwan Corporate representative of ZENITRON
General Manager Taiwan Male YEH,LU-CHANG 2020.09.01 700,000 0.33 300,000 0.14 - - Special Assistant for Chairman of the Director of ZTHC (Shanghai) - Corporate - - -
Board of Directors of Les enphants Representative of ZENITRON (H.K) LIMITED
Co.,Ltd. Supervisor Zenitron (Shanghai) International
Trading Co., Ltd. - Corporate Representative of
ZENITRON (H.K) LIMITED
Chairman of Yutseng Investment Co., Ltd.
M.B.A., National Taiwan University Master of Business Administration for Senior Director of Zenitex Investment Co., Ltd. Director of RAYTRONIC CORPORATION - CHOU,YEO Father and son
CEO Taiwan Male CHOU,CHUN-KUANG 2020.09.01 3,430,502 1.60 977,883 0.46 - - Management, Fudan University Corporate representative of ZENITRON Chairman Chief Executive U-YIH CHOU,CHU Brothers
Master of Communication,, Melbourne, Australia Director of Zenicom (HK) Limited - Corporate Officer N-HSIEN
representative of SUPERTRONIC
Supervisor of ZENIBOSS CORPORATION
Department of Computer Science and Electrical CHOU,YEO
CEO Taiwan Male CHOU,CHUN-HSIEN 2020.09.01 3,557,925 1.66 5,000 0.00 - - Engineering, Monash University MS in Telecommunications Engineering, Chairman of Cordial Investment Corporation - Corporate representative of ZENITRON Chairman Chief Executive U-YIH CHOU,CHU Father and son Brothers
University of Melbourne Chairman of Zenitex Investment Co., Ltd. Officer N-KUANG
Entrepreneurial Management Course, National Supervisor of Yutseng Investment (Co.,) Ltd.
Chengchi University
Kuang Wu Industry Junior College
General Manager Male YEH,JUNG-HUI 2020.09.01 91,563 0.04 148 0.00 - - Business Director, Ginlong Technologies None - - -
of Business Group [Taiwan ] Co.,Ltd.
Master’s Degree in Business
Administration, National Taiwan
General Manager Male CHANG,CHANG-FU 2020.09.01 432,050 0.20 67,950 0.03 - - University of Science and Technology None - - -
of Business Group [Taiwan ]
Sales Director, INTECH
ELECTRONICS CORP.
Master’s Degree in Business
Administration, Columbia Southern
University
Senior Deputy Taiwan Male LI,CHUNG-HSING 2019.10.01 - - - - - - Director of Business Affairs, Lite-On None - - -
General Manager
Semiconductor Corp.
ON Semiconductor / Greater China
Marketing Manager
St. John’s and St. Mary’s Institute of
Technology
Deputy General Taiwan Male LIU,YING-TSO 2018.09.10 - - - - - - Business Director of PACIFIC None - - -
Manager REALTOR CO., LTD.
Sales Manager of Farglory Group
Department of Mechanical Engineering,
Deputy General Taiwan Male CHEN,TING-HUANG 2018.09.10 2,000 - - - - - Tamkang University None - - -
Manager M.S. in Technology Management, Fu Jen
Catholic University
Master’s Degree in School of Economics
and Management, Tsinghua University
Chief of Finance Taiwan Female Yu, Shu-Yi 2021.03.22 - - - - - - Finance Senior Manager of Taiwan None - - -
Cement Corporation
Finance Manager of HTC Corporation
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(4) Remuneration of Director(Directors, Supervisors, General Manager, and Deputy General Manager in recent years:

(1) Remuneration of Directors and Independent Directors

2020 Unit: NT$1,000; %

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Directors’ Remuneration Relevant Remuneration Received by Directors Who are Also Employees
Ratio of Total Ratio of Total
Remuneration Compensation Compensat
Compensation Base Severance Pay (B) Bonus to Directors (C) Allowances (D) (A+B+C+D) to Net Income Salary, Bonuses, and Severance Pay (F) Profit Sharing- Employee Bonus (G) (A+B+C+D+E+F+G) to Net Income ion Paid to Directors
(A) Allowances (E) (Note 1) from an
Invested
Title Name Company
Compa Compan Companies in the Other than
nies in Compani ies in The Company consolidated the
the es in the Companies Companies Companies Companies the financial statements Companies in Subsidiarie
The consoli consolid in the in the in the in the consolid the
The The The The The The The s or Parent
Compa dated ated consolidate consolidate consolidate consolidate ated consolidated
ny financi Company financial Company d financial Company d financial Company d financial Company d financial Company financia Cash Stock Cash Stock Company financial Company
al statemen statements statements statements statements l Amount Amount Amount Amount statements
stateme ts stateme
nts nts
Chairman CHOU,YEOU-YIH
Vice
Chairman CHEN,HSIN-YI
Directors HSIEH,SHIH-FU
Directors FANG,YI-HSIUNG - - - - 12,600 12,600 230 230 2.72% 2.72% 14,865 14,865 216 216 - - - - 5.91% 5.91% None
Directors Yutseng Representative:
CHOU,CHUN-KUANG
Directors Zenitex Representative:
CHOU,CHUN-HSIEN
Independent Director LIU,CHUN
Independent Director HSIAO,MIN-CHIH - - - - 2,400 2,400 120 120 0.53% 0.53% - - - - - - - - 0.53% 0.53% None
Independent Director HSU,JUI-MAO
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Note 1: Retirement pension is an expense-based contribution to the pension fund.

Note 2: In accordance with the Company's Articles of Incorporation, the compensation of the Company's directors is based on their participation in the Company's operations, the value of their contributions, and the level of the industry, and the Board of Directors is authorized to determine the compensation based on the evaluation of the Compensation Committee, and the Company's Articles of Incorporation specify that the compensation of directors shall not exceed 3% of annual earnings.

• Except as disclosed in the table above, the remuneration received by the directors of the Company for services rendered to all companies in the financial statements (e.g., as consultants to non-employees) in the most recent year: 0

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Range of Remuneration

2020

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Name of Directors
Total of (A+B+C+D) Total of (A+B+C+D+E+F+G)
Range of remuneration paid to each of the
Companies in the
Company’s directors Companies in the consolidated
The Company consolidated financial The Company
financial statements
statements
Hsieh, Shih-Fu, Fang, Hsieh, Shih-Fu, Fang,
Fang, Yi-Hsiung, Hsieh, Shih-Fu, Fang, Yi-Hsiung, Hsieh, Shih-Fu,
Yi-Hsiung, Liu Jun, Hsiao, Yi-Hsiung, Liu Jun,
Under NT$ 1,000,000 Liu Jun, Hsiao, Min-Chi, Hsu, Liu Jun, Hsiao, Min-Chi, Hsu,
Min-Chi, Hsu, Jui-Mao Hsiao, Min-Chi, Hsu,
Jui-Mao Jui-Mao
Jui-Mao
NT$1,000,000 (inclusive) ~ NT$2,000,000 Chen, Hsin-Yi Chen, Hsin-Yi
(exclusive) - -
Chou, Yeou-Yih, Zenitex Chou, Yeou-Yih, Zenitex Chen, Hsin-Yi Chen, Hsin-Yi
NT$2,000,000 (inclusive) ~ NT$3,500,000 Investment (Co.,) Ltd., Investment (Co.,) Ltd.,
(exclusive) Yutseng Investment (Co.,) Yutseng Investment (Co.,)
Ltd. Ltd.
NT$3,500,000 (inclusive) ~ NT$5,000,000 - -
(exclusive) - -
Chou, Yeou-Yih, the
Chou, Yeou-Yih, the Representative
Representative of Yutseng
of Yutseng Investment (Co.,) Ltd.:
Investment (Co.,) Ltd.:
NT$5,000,000 (inclusive) ~ NT$10,000,000 Chou, Chun-Kuang, the
Chou, Chun-Kuang, the
(exclusive) Representative of Zenitex
Representative of Zenitex
Investment (Co.,) Ltd.:
Investment (Co.,) Ltd.:
Chou, Chun-Hsien
Chou, Chun-Hsien
NT$10,000,000 (inclusive) ~ NT$15,000,000 - -
(exclusive) - -
NT$15,000,000 (inclusive) ~ NT$30,000,000 - -
(exclusive) - -
NT$30,000,000 (inclusive) ~ NT$50,000,000 - -
(exclusive) - -
NT$50,000,000 (inclusive) ~ NT$100,000,000 - -
(exclusive) - -
NT$100,000,000 or over - - - -
Total 9 9 9 9
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(2) Supervisors’ Remuneration

In order to promote corporate governance, the Company has established an Audit Committee to replace the Supervisors on 2015.06.10 in accordance with the Securities and Exchange Act.

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(3) Remuneration of General Manager, and Deputy General Manager

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2020 Unit: NT$1,000; %
Ratio of Total Compens
Bonus and special Remuneration ation
Salary (A) Severance Pay (B) allowance, etc. (C) Employee bonus (D) (A+B+C+D) to Net Paid to
Income (%) Directors
Companies in the from an
The Company consolidated Invested
Title Name Companies Companies Companies financial statements Companies Company
in the in the in the in the Other
The The The The
consolidate consolidate consolidate consolidate than the
Company d financial Company d financial Company d financial Cash Stock Cash Stock Company d financial Subsidiar
statements statements statements Amount Amount Amount Amount statements ies or
Parent
Company
YEH,LU-C
General Manager HANG
CEO CHOU,CHUN-KUANG
CEO CHOU,CHUN-HSIEN
General Manager of YEH,JUNG-
Business Group HUI
General Manager of CHANG,CH
Business Group ANG-FU 18,059 18,059 856 856 4,849 4,849 0 0 0 0 5.03% 5.03% None
Senior Deputy General LI,CHUNG-
Manager HSING
Deputy General LIU,YING-
Manager TSO
Deputy General CHEN,TIN
Manager G-HUANG
LIN,
Deputy General CHI-PING
Manager
(Note1)
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Note 1: Deputy General Manager, Lin, Chi-Ping, has been dismissed from duty adjustment on March 31, 2021

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Range of Remuneration
Range of remuneration paid to each of the Company’s Name of General Manager, and Deputy General Manager
General Manager Deputy General Manager The Company Companies in the consolidated financial statements
Under NT$ 1,000,000 Lin, Chi-Ping Lin, Chi-Ping
NT$1,000,000 (inclusive) ~ NT$2,000,000
(exclusive)
NT$2,000,000 (inclusive) ~ NT$3,500,000 Yeh, Jung-Hui, Chang, Chang-Fu, Li, Chung-Hsing, Liu, Yeh, Jung-Hui, Chang, Chang-Fu, Li, Chung-Hsing, Liu,
(exclusive) Ying-Tso, Chen, Ting-Huang Ying-Tso, Chen, Ting-Huang
NT$3,500,000 (inclusive) ~ NT$5,000,000
Yeh, Lu-Chang, Chou, Chun-Kaung, Chou, Chun-Hsien Yeh, Lu-Chang, Chou, Chun-Kaung, Chou, Chun-Hsien
(exclusive)
NT$5,000,000 (inclusive) ~ NT$10,000,000
(exclusive) - -
NT$10,000,000 (inclusive) ~ NT$15,000,000 - -
(exclusive)
NT$15,000,000 (inclusive) ~ NT$30,000,000 - -
(exclusive)
NT$30,000,000 (inclusive) ~ NT$50,000,000 - -
(exclusive)
NT$50,000,000 (inclusive) ~ NT$100,000,000
- -
(exclusive)
NT$100,000,000 or over - -
Total 9 9
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• (4) The names of the manager received the distribution of employee’s remuneration and the distribution status

2020

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

Unit: NT$1,000; %
Total amount as a
percentage of net
Title Name Stock Amount Cash Amount Total
income after tax
(%)
General Manager YEH,LU-CHANG
CEO CHOU,CHUN-K
UANG
CEO CHOU,CHUN-HS
IEN
General Manager of
YEH,JUNG-HUI
Mana Business Group General Manager of CHANG,CHANG - - - -
gers Business Group -FU
Senior Deputy General LI,CHUNG-HSIN
Manager G
Deputy General Manager LIU,YING-TSO
CHEN,TING-HU
Deputy General Manager ANG
LIN, CHI-PING
Deputy General Manager
(Note1)
----- End of picture text -----

Note 1: Deputy General Manager, Lin, Chi-Ping, has been dismissed from duty adjustment on March 31, 2021

• (5) An analysis of the total compensation paid to the Company’s directors, general manager and deputy general manager percentage of net income after tax for the most recent two-year period for the Company and all consolidated companies, respectively, and a description of the policy, standard and combination of compensation payments, the process for setting compensation, and the relationship to operating performance and future risks:

(5)	An analysis of the total compensation paid to the Company’s directors, general manager and deputy general manager percentage of net income after tax for the most recent two-year period for the Company and all consolidated companies, respectively, and a description of the policy, standard and combination of compensation payments, the process for setting compensation, and the relationship to operating performance and future risks:	An analysis of the total compensation paid to the Company’s directors, general manager and deputy general manager percentage of net income after tax for the most recent two-year period for the Company and all consolidated companies, respectively, and a description of the policy, standard and combination of compensation payments, the process for setting compensation, and the relationship to operating performance and future risks:	An analysis of the total compensation paid to the Company’s directors, general manager and deputy general manager percentage of net income after tax for the most recent two-year period for the Company and all consolidated companies, respectively, and a description of the policy, standard and combination of compensation payments, the process for setting compensation, and the relationship to operating performance and future risks:	An analysis of the total compensation paid to the Company’s directors, general manager and deputy general manager percentage of net income after tax for the most recent two-year period for the Company and all consolidated companies, respectively, and a description of the policy, standard and combination of compensation payments, the process for setting compensation, and the relationship to operating performance and future risks:	An analysis of the total compensation paid to the Company’s directors, general manager and deputy general manager percentage of net income after tax for the most recent two-year period for the Company and all consolidated companies, respectively, and a description of the policy, standard and combination of compensation payments, the process for setting compensation, and the relationship to operating performance and future risks:	An analysis of the total compensation paid to the Company’s directors, general manager and deputy general manager percentage of net income after tax for the most recent two-year period for the Company and all consolidated companies, respectively, and a description of the policy, standard and combination of compensation payments, the process for setting compensation, and the relationship to operating performance and future risks:	An analysis of the total compensation paid to the Company’s directors, general manager and deputy general manager percentage of net income after tax for the most recent two-year period for the Company and all consolidated companies, respectively, and a description of the policy, standard and combination of compensation payments, the process for setting compensation, and the relationship to operating performance and future risks:	An analysis of the total compensation paid to the Company’s directors, general manager and deputy general manager percentage of net income after tax for the most recent two-year period for the Company and all consolidated companies, respectively, and a description of the policy, standard and combination of compensation payments, the process for setting compensation, and the relationship to operating performance and future risks:
	2020 Unit: NT$1,000; %
Year Title 2019 2020 The Company Companies in the consolidated financial statements The Company Companies in the consolidated financial statements Total remuneration Total amount as a percentage of net income after tax Total remuneration Total amount as a percentage of net income after tax Total remuneration Total amount as a percentage of net income after tax Total remuneration Total amount as a percentage of net income after tax	2019 2020
	The Company Companies in the consolidated financial statements The Company Companies in the consolidated financial statements
Directors 22,389 9.71% 22,389 9.71% 30,431 6.45% 30,431 6.45%
General Manager and Deputy General Manager	22,361	9.70%	22,361	9.70%	23,764	5.03%	23,764	5.03%

The policy, criteria and composition of compensation payments, the procedures for setting compensation, and the correlation with operating performance and future risks.

• 1.The remuneration for the Company's directors and managers is subject to less than 3% of annual profit pursuant to the Artilces of Incorporation; in case of profit, its 3%~12% shall be appropriated as the salary to employee; remuneration for directors and managers is calculated by its depth involved with operation, personal contribution and other criteria such as: whether any events imposing moral risks or causing adverse effect on corporate image occurred to them, improper internal management, staff malpractice, target achievement rate, profitability and others for integrative consideration, referring to peer industry standard and including them

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into a proposal by Remuneration Committee Member for discussion and resolution by the Board of Directors.

• 2.In addition, the Company has purchased liability insurance for all directors and managers in the amount of US$5,000,000 to mitigate the unknown risks borne by the Company and to pass on possible damages to directors and key employees and the Company in the performance of their duties through directors' and managers' liability insurance.

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(III) Implementation of Corporate Governance:

(1) Information on the operation of Board of Directors:

A total of 4 meetings of the Board of Directors were held in 2020. The attendance of directors was as follows:

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Attendance
Attendance Rate
Title Name in Person By Proxy Remarks
(%)
B
Chairman CHOU,YEOU-YIH 4 0 100.00% Re-elected
Vice Re-elected
CHEN,HSIN-YI 4 0 100.00%
Chairman
Representative of
Directors Yutseng: 3 0 75.00% Re-elected
CHOU,CHUN-KUANG
Representative of
Directors Zenitex: 4 0 100.00% Re-elected
CHOU,CHUN-HSIEN
Directors HSIEH,SHIH-FU 4 0 100.00% Re-elected
Directors FANG,YI-HSIUNG 4 0 100.00% Re-elected
Independent Re-elected
HSU,JUI-MAO 4 0 100.00%
Director
Independent Re-elected
LIU,CHUN 4 0 100.00%
Director
Independent Re-elected
HSIAO,MIN-CHIH 4 0 100.00%
Director
Other mentionable items:
I. (1) Matters listed in Article 14-3 of the Securities and Exchange Act.
All Independent
Directors'
Opinions and the
Company's
Meeting Date (Period) Content of the Proposals
Handling of
Independent
Directors'
Opinions
March 20 Approval of our company to provide endorsement guarantee
(2020
1st Board Meeting)
May 13 Approval of our company to provide endorsement guarantee
(2020
2nd Board Meeting)
August 12 Approval of our company to provide endorsement guarantee
(2020 Approved accounts receivable with significant amounts All Independent
outstanding for three months beyond the normal credit period Directors
3rd Board Meeting)
Approved
November 9 Approval of our company to provide endorsement guarantee
(2020
4th Board Meeting)
March 22 Approval of financial and accounting officer changes
(2021 Approval of our company to provide endorsement guarantee
1st Board Meeting)
(2) Other resolutions of the Board of Directors that are opposed or qualified by the independent directors
and for which records or written statements are available: None
(II) Status of implementation on recusal of directors from proposals related to their interests: None
----- End of picture text -----

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(3) Objectives of strengthening the functions of the Board of Directors for the current and most recent years: The Board of Directors has established an Audit Committee and a Compensation Committee to assist the Board of Directors in performing its supervisory duties and to report its activities and resolutions to the Board of Directors on a regular basis, respectively.

(2) Status of implementation on the evaluation of the Board of Directors

(2)Status of implementation on the evaluation of the Board of Directors	(2)Status of implementation on the evaluation of the Board of Directors	(2)Status of implementation on the evaluation of the Board of Directors	(2)Status of implementation on the evaluation of the Board of Directors	(2)Status of implementation on the evaluation of the Board of Directors
Evaluation cycle Evaluation period Evaluation scope Evalua tion metho ds Evaluation contents
Executed once a year	2020.01.01-2 020.12.31	1. The Board of Directors 2. Individual Board Members 3. Functional Committee	The board of directo rs, individ ual board membe rs and functio nal commi ttees comple te their own perfor mance evaluat ion self-ass essmen t questio nnaires	Self-evaluation by the Board 1. Participation in the Company’s operation 2. Enhancement of the decision quality of the functional committee 3. Composition of the functional committee and the election of committee members 4. Election and continuous learning of directors 5. Internal Control Self-evaluation by the members of the Board 1. Understanding of the Company goals and missions 2. Director’s understanding of their duties and responsibilities 3. Participation in the Company’s operation 4. Internal relation maintenance and communications 5. Election and continuous learning of directors 6. Internal Control Self-evaluation by Audit Committee 1. Participation in the Company’s operation 2. Understanding of the Functional Committee’s duties and responsibilities 3. Enhancement of the decision quality of the functional committee 4. Understanding of the Functional Committee’s duties and responsibilities 5. Internal Control Self-evaluation by Compensation Committee

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1. Participation in the
Company’s operation
2. Understanding of the
Functional Committee’s duties
and responsibilities
3. Enhancement of the decision
quality of the functional
committee
4. Understanding of the
Functional Committee’s duties
and responsibilities
The results of the overall board
evaluation for the year 2020,
with an average score of
4.51-4.73 out of 5 for each
component, indicated that the
overall operation of the
Company’s board of directors
was good, and the results were
presented to the board of
directors at its meeting on March
22, 2021. The Company will
continue to enhance the
effectiveness of corporate
governance based on the results
of the 2020 Board of Directors'
evaluation.
----- End of picture text -----

• (3) Supervisors’ participation in the operation of the Board of Directors:

• In order to promote corporate governance, the Company has established an audit committee to replace the supervisors in accordance with the Securities and Exchange Act, and re-elected three independent directors on June 10, 2015. Therefore, there is no supervisor participation in the operation of the board of directors.

• (4) Information on the implementation status of the audit committee:

• The Audit Committee of the Company consists of three independent directors. The purpose of the Audit Committee is to assist the Board of Directors in fulfilling its role of overseeing the quality and integrity of the Company in performing accounting, auditing, financial reporting processes and financial controls.

• The annual work highlights of the Audit Committee are as follows.

• l Financial Statement Review

• l Review of audit and accounting policies and procedures

• l Appraisal of internal control system and related policies and procedures

• l Significant asset or derivative transactions

• l Significant lending, endorsement or guarantee of funds

• l Supervision of regulatory compliance

• l Management Information Security

• l Company’s risk management:

• l Qualifications, Independence and Performance Evaluation of Certified Public Accountants

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l Appointment, Dismissal or Compensation of Certified Public Accountants l Appointment and removal of finance, accounting or internal audit supervisors 3. The term of office of the current members: June 12, 2018 to June 11, 2021. A total of 4 meetings (A) of the Audit Committee member were held in 2020. The qualification and attendance were as follows:

Title Name Attendance in Person(B) By Proxy Attendance Rate (%) (B/A) (Note)		Remarks
Convener HSU,JUI-MAO 4 0 100.00%
Committee member LIU,CHUN 4 0 100.00%
Committee member HSIAO,MIN-C HIH 4 0 100.00%
Other mentionable items:
I. (1) Matters listed in Article 14-5 of the Securities and Exchange Act.
(2) Other resolutions not approved by the Audit Committee and approved by two-thirds or		more of all directors:
Meeting Date (Period) Content of the Proposals		All Independent Directors' Opinions and the Company's Handling of Independent Directors' Opinions
March 20 (2nd Committee 7th Meeting) Approved Financial Statements for the Year 2019 Approve the Company’s 2019 Self-Assessment of Internal Control and Statement of Internal Control System Approval of our company to provide endorsement guarantee and loans of funds to others
May 13 (2nd Committee 8th Meeting) Approval of our company to provide endorsement guarantee and loans of funds to others
August 12 (2nd Committee 9th Meeting) Approved Financial Statements for the 2020 Q2 Approval of our company to provide endorsement guarantee		All Independent Directors Approved
November 9 (2nd Committee 10th Meeting) Approval of our company to provide endorsement guarantee and loans of funds to others
March 22 Approved Financial Statements for the Year 2020
(2nd Committee Approve the Company’s 2020 Self-Assessment of Internal Control
11th Meeting) and Statement of Internal Control System
Approval of financial and accounting officer changes
Approval of our company to provide endorsement guarantee and
loans of funds to others
None.
(II) Status of implementation on recusal of Independent directors from proposals related to their interests: None.
(III) Communications among independent directors, supervisors and internal audit supervisors and the CPAs:
(1) The head of internal audit of the Company regularly communicates with the Audit Committee on the results of
audit reports and makes internal audit reports at the Audit Committee meetings on a quarterly basis,			and
reports to the Audit Committee members immediately if there are special circumstances. There were no such
special conditions in the year 2020. The Company's Audit Committee has good communication with the Head
of Internal Audit.

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n	(2) The Company's certified public accountants report the results of their audits or reviews of the financial statements and other communications required by the relevant laws and regulations at each quarterly meeting of the Audit Committee, and report to the members of the Audit Committee immediately if there are any special circumstances. The Company's Audit Committee has good communication with the certified public accountants. MeetingDate (Period) Communicationwith internal auditsupervisor Communications with CPAs March 20 (2nd Committee 7th Meeting) Review of internal audit reports Approve the Company’s 2019 Self-Assessment of Internal Control and Statement of Internal Control System Approved Financial Statements for the Year 2019 Review of the qualifications, performance and independence of the certifying accountant May 13 (2nd Committee 8th Meeting) Review of internal audit reports Approved Financial Statements for 2020 Q1 August 12 (2nd Committee 9th Meeting) Review of internal audit reports Approved Financial Statements for the 2020 Q2 November 9 (2nd Committee 10th Meeting) Review of internal audit reports Approved Financial Statements for 2020 Q3 March 22 (2nd Committee 11th Meeting) Review of internal audit reports Approve the Company’s 2020 Self-Assessment of Internal Control and Statement of Internal Control System Approved Financial Statements for the Year 2020 Review of the qualifications, performance and independence of the certifying accountant Results: The above matters were reviewed or approved by the Audit Committee and the independent directors had o objection.	(2) The Company's certified public accountants report the results of their audits or reviews of the financial statements and other communications required by the relevant laws and regulations at each quarterly meeting of the Audit Committee, and report to the members of the Audit Committee immediately if there are any special circumstances. The Company's Audit Committee has good communication with the certified public accountants. MeetingDate (Period) Communicationwith internal auditsupervisor Communications with CPAs March 20 (2nd Committee 7th Meeting) Review of internal audit reports Approve the Company’s 2019 Self-Assessment of Internal Control and Statement of Internal Control System Approved Financial Statements for the Year 2019 Review of the qualifications, performance and independence of the certifying accountant May 13 (2nd Committee 8th Meeting) Review of internal audit reports Approved Financial Statements for 2020 Q1 August 12 (2nd Committee 9th Meeting) Review of internal audit reports Approved Financial Statements for the 2020 Q2 November 9 (2nd Committee 10th Meeting) Review of internal audit reports Approved Financial Statements for 2020 Q3 March 22 (2nd Committee 11th Meeting) Review of internal audit reports Approve the Company’s 2020 Self-Assessment of Internal Control and Statement of Internal Control System Approved Financial Statements for the Year 2020 Review of the qualifications, performance and independence of the certifying accountant Results: The above matters were reviewed or approved by the Audit Committee and the independent directors had o objection.	(2) The Company's certified public accountants report the results of their audits or reviews of the financial statements and other communications required by the relevant laws and regulations at each quarterly meeting of the Audit Committee, and report to the members of the Audit Committee immediately if there are any special circumstances. The Company's Audit Committee has good communication with the certified public accountants. MeetingDate (Period) Communicationwith internal auditsupervisor Communications with CPAs March 20 (2nd Committee 7th Meeting) Review of internal audit reports Approve the Company’s 2019 Self-Assessment of Internal Control and Statement of Internal Control System Approved Financial Statements for the Year 2019 Review of the qualifications, performance and independence of the certifying accountant May 13 (2nd Committee 8th Meeting) Review of internal audit reports Approved Financial Statements for 2020 Q1 August 12 (2nd Committee 9th Meeting) Review of internal audit reports Approved Financial Statements for the 2020 Q2 November 9 (2nd Committee 10th Meeting) Review of internal audit reports Approved Financial Statements for 2020 Q3 March 22 (2nd Committee 11th Meeting) Review of internal audit reports Approve the Company’s 2020 Self-Assessment of Internal Control and Statement of Internal Control System Approved Financial Statements for the Year 2020 Review of the qualifications, performance and independence of the certifying accountant Results: The above matters were reviewed or approved by the Audit Committee and the independent directors had o objection.
	MeetingDate (Period)	Communicationwith internal auditsupervisor	Communications with CPAs
	March 20 (2nd Committee 7th Meeting)	Review of internal audit reports Approve the Company’s 2019 Self-Assessment of Internal Control and Statement of Internal Control System	Approved Financial Statements for the Year 2019 Review of the qualifications, performance and independence of the certifying accountant
	May 13 (2nd Committee 8th Meeting)	Review of internal audit reports	Approved Financial Statements for 2020 Q1
	August 12 (2nd Committee 9th Meeting)	Review of internal audit reports	Approved Financial Statements for the 2020 Q2
	November 9 (2nd Committee 10th Meeting)	Review of internal audit reports	Approved Financial Statements for 2020 Q3
	March 22 (2nd Committee 11th Meeting)	Review of internal audit reports Approve the Company’s 2020 Self-Assessment of Internal Control and Statement of Internal Control System	Approved Financial Statements for the Year 2020 Review of the qualifications, performance and independence of the certifying accountant
	Results: The above matters were reviewed or approved by the Audit o objection.

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(5) The Company and the Subsidiaries’ Corporate Governance Status, Deviations from “the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons

(5) The Company and the Subsidiaries’ Corporate Governance Status, Deviations from “the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons	(5) The Company and the Subsidiaries’ Corporate Governance Status, Deviations from “the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons	(5) The Company and the Subsidiaries’ Corporate Governance Status, Deviations from “the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons	(5) The Company and the Subsidiaries’ Corporate Governance Status, Deviations from “the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons	(5) The Company and the Subsidiaries’ Corporate Governance Status, Deviations from “the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
Evaluation Item ImplementationStatus Deviations from “the Corporate Governance Best Practice Principles” and Reasons Yes No Abstract Illustration
1. Does the Company establish and disclose the Corporate Governance Best-Practice Principles based on “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”? � The Company has established a Code of Corporate Governance Practices, which is disclosed on the Market Observation Post System and the Company's website. None.
2. Shareholding structure & shareholders’ rights (1) Has the Company established internal operating procedures to deal with shareholders’ suggestions, doubts, disputes and litigations, and implement based on the procedures? (2) Does the Company possess the list of its major shareholders as well as the ultimate owners of those shares? (3) Has the Company established and implemented risk management and firewall mechanisms with	� � �		(1) The Code of Corporate Governance Practices has set forth the relevant contents and is handled by the Company's spokesperson and acting spokesperson. (2) The list of insiders' shareholdings is kept through a pre-post reporting system. (3) The Company's internal control system includes the "Supervision of Subsidiaries" and the "Written System for the Management of Related Party Transactions", and has clearly delineated and operated the authority and responsibility for the management ofpersonnel andpropertyof each company.	None.

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Evaluation Item	ImplementationStatus Deviations from “the Corporate Governance Best Practice Principles” andReasons Yes No Abstract Illustration	ImplementationStatus Deviations from “the Corporate Governance Best Practice Principles” andReasons Yes No Abstract Illustration	ImplementationStatus Deviations from “the Corporate Governance Best Practice Principles” andReasons Yes No Abstract Illustration	ImplementationStatus Deviations from “the Corporate Governance Best Practice Principles” andReasons Yes No Abstract Illustration
its affiliates? (4) Has the Company established internal rules against insiders trading with undisclosedinformation?	� (4) The Company's Code of Conduct on Integrity has stipulated that insiders are prohibited from engaging in insider trading using undisclosed information known to the Company.
3. Composition and responsibilities of the Board of Directors (1) Has the Board developed and implemented a diversified policy for the composition of its members? (3) Has the Company voluntarily established other functional committees in addition to the Remuneration Committee and the Audit Committee? (3) Does the Company establish a standard to measure the performance of the Board, and implement it annual?	� � �		(1) The Code of Corporate Governance Practice has specified that the composition of the Board of Directors should consider diversity to ensure that the Board as a whole has the ability to exercise operational judgment, management and analytical supervision, and that it has the ability to implement the diversity policy and perform its duties as required by the following table (Note 2) (2) In addition to the establishment of the Compensation Committee in accordance with the law, the Company’s Code of Governance Practice provides that the Company may establish various functional committees taking into account the size of the Board of Directors and the number of independent directors. The Company has also formally elected independent directors, amended its charter and established an audit committee in 2015, and will discuss the establishment of other functional committees after taking into account the above factors. (3) The Company’s Board of Directors resolved on March 20, 2020 to establish the "Board of Directors' Performance Evaluation Method", the scope of which is to evaluate the performance of the Board of Directors and the functional committees established by the Company. The performance evaluation may be conducted by the Board of Directors through internal self-evaluation, self-evaluation by Board members and performance evaluation byan external independent organization or a team of	None.

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Implementation Status Deviations from
“the Corporate
Evaluation Item Governance Best
Yes No Abstract Illustration
Practice Principles”
and Reasons
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experts and scholars. The performance evaluation of the Board of Directors includes the following six major aspects. 1. Participation in the Company’s operation 2. Internal control and risk management of the company 3. Management of external and internal relations 4. Composition and Capacity of the Board of Directors 5. Board Decision Quality and Operation 6. the implementation of the current work objectives and achieve The performance of the functional committees established by the Board of Directors is evaluated with respect to the following indicators. 1. Operation of the Committee 2. Achievement of the current committee's work objectives The evaluation of the internal performance of the Board as a whole is conducted by the Company's governance unit after the end of the year and the results are presented at the most recent Board meeting after completion and will be used as one of the references for future selection or nomination of directors. The evaluation of the overall Board of Directors for the 2020 was completed at the beginning of 2021 and the average score for each component of the evaluation was 4.51-4.73 out of 5, indicating that the overall operation of the Board of Directors of the Company was good and the results were presented to the Board of Directors at its meeting on March 22, 2021. The Company will continue to enhance the effectiveness of corporate governance based on the results of the 2020 Board of Directors' evaluation. (Please refer to page 34 for each evaluation)

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Evaluation Item	ImplementationStatus Deviations from “the Corporate Governance Best Practice Principles” and Reasons Yes No Abstract Illustration	ImplementationStatus Deviations from “the Corporate Governance Best Practice Principles” and Reasons Yes No Abstract Illustration	ImplementationStatus Deviations from “the Corporate Governance Best Practice Principles” and Reasons Yes No Abstract Illustration	ImplementationStatus Deviations from “the Corporate Governance Best Practice Principles” and Reasons Yes No Abstract Illustration
(4) Does the Company regularly evaluate the independence of CPAs?	� (4) The Company’s accounting unit evaluates the independence of the certified public accountants once a year and submits the results to the Audit Committee and the Board of Directors for their consideration and approval on March 22, 2021. The Company’s financial unit has evaluated that Messrs. CHEN,CHIN-CHANG and LIN,YI-FAN, both of whom are certified public accountants, meet the Company’s independence evaluation criteria (Note 1) and are qualified to serve as the Company’s certifiedpublic accountants.
4. Has the TWSE/TPEx listed company set up a dedication (or concurrent) corporate governance unit or appointed personnel responsible for corporate governance related matters (including but not limited to providing the directors and supervisors with required information to carry out their business, handling corporate registration and change of corporate registration related matters and taking the minutes of meetings)?	�		In order to implement governance and enable the Board of Directors to perform its due functions to protect the rights and interests of investors, the Board of Directors resolved on March 22, 2021 to appoint the Chief of Finance, YU,SHU-YI, as the Head of Corporate Governance, Chief Yu had more than 3 years of experiences in the position of a finance supervisor for listed companies and the Unit is responsible for reporting directly to her. The primary responsibility of the Head of Corporate Governance is to provide the directors with information necessary to carry out their business and to assist them in complying with the latest regulatory developments relating to operations. In addition to complying with the provisions of the Act, the stock unit shall conduct the meetings of the board of directors and shareholders, prepare the minutes of the board of directors' and shareholders' meetings in accordance with the law, and follow the following principles. 1. The Company discloses material information in a timely manner to protect investors' trading information. 2. To maintain communication and exchange between the Board of Directors and the management team. 3. To enhance the efficiency of the Board's operations, an internal performance evaluation of the Board's overall operations for the previous year is conducted annuallyand the results arepresented to the Board.	None.

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Implementation Status Deviations from
“the Corporate
Evaluation Item Governance Best
Yes No Abstract Illustration
Practice Principles”
and Reasons
4. From time to time, we will provide information about the director's further
education and complete the reporting of the required hours.
5. We review the achievement of corporate governance evaluation indicators on an
annual basis and provide improvement plans and countermeasures for the
indicators that are not scored.
6. To handle the registration of changes in the company’s operations.
5. Has the Company established �� The Company has an investor area on the Company's website with spokespersons and None.
communication channels and related business contact information, and interested parties can contact the Company
dedicated sections for by phone or e-mail.
stakeholder (including but
not limited to the
shareholders, employees,
clients and suppliers) on its
website to respond to
important issues of corporate
social responsibility
concerns?
6. Has the Company appointed a �� The Company has appointed Taishin International Bank, a professional stockbroker, None.
professional shareholder to conduct the shareholders’ meeting.
service agency to deal with
shareholder affairs?
7. Disclosure of information None.
(1) Does the Company have a �� (1)The Company maintains a corporate website (http://www.zenitron.com.tw/), which
corporate website to discloses financial operations and corporate governance information and is
disclose both financial updated from time to time for investors' review.
standings and the status of
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Implementation Status Deviations from
“the Corporate
Evaluation Item Governance Best
Yes No Abstract Illustration
Practice Principles”
and Reasons
----- End of picture text -----

Evaluation Item	Yes	No	Abstract Illustration	“the Corporate Governance Best Practice Principles” and Reasons
corporate governance? (2) Does the Company have other information disclosure channels (e.g. building an English website, appointing designated people to handle information on collection and disclosure, creating a spokesperson system, webcasting investor conferences)? (3) Did the Company announce and declare the annual financial statement within two months at the end of the accounting year and announce and declare the Q1, Q2 and Q3 financial statement and monthly operational status prior to the deadline in the regulation?	�	�	(2) The Company has a spokesperson and an acting spokesperson. In addition to the Chinese version, the website is also available in English and Simplified Chinese. Important information about the corporate presentation, if any, is also available on the Company's website and on the Market Observation Post System. (3) The Company's financial reports and operations for each month were announced and reported within the statutory deadlines.

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Implementation Status Deviations from
“the Corporate
Evaluation Item Governance Best
Yes No Abstract Illustration
Practice Principles”
and Reasons
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8. Is there any other important information to facilitate a better understanding of the Company’s corporate governance practices (e.g. including but not limited to employee rights, employee wellness, investor relations, supplier relations, rights of stakeholders, directors’ and supervisors’ training records, the implementation of risk management policies and risk evaluation measures, the implementation of customer relations policies, and purchasing insurance for directors and supervisors)?	�		(1 Employee benefits: We have established various employee welfare measures, training and retirement systems to protect the rights and interests of employees, and have established employee handbooks for daily management in accordance with the law. (2) Employee Care: The Company establishes direct communication and care with employees through labor-management meetings and the operation of the Employee Welfare Committee. (3) Investor Relations: The Company has a spokesperson and a proxy spokesperson to provide a bridge between the Company and its investors. The Company has also set up investor contact information and information notification services on the Company's website, and provides appropriate and reasonable answers to incoming inquiries in order to maintain communication with the investing public. (4) Supplier relations: The Company maintains smooth communication channels with its suppliers and upholds the principle of honesty and trust in its dealings with them. (5) Stakeholders' rights: The Company is committed to technological innovation and improved services to customers, creating a working environment for employees to grow, seeking a stable return on investment for shareholders through revenue and profit growth, and pursuing the maximum value for shareholders, employees and society as a whole. We also set up contact information and email notification service on the company’s website, and provide appropriate and reasonable answers to incoming inquiries in order to maintain communication. (6) Directors (including independent directors): All directors (including independent directors) of the Company have a background in finance, business, accounting, information, etc., and their education has been entered into the Market Observation Post System in accordance with the regulations. The accountants and legal advisors appointed bythe Companyalsoprovide appropriate legal	The Company has implemented the Code of Corporate Governance Practices for listed companies without significant differences.

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advice to help enhance their legal literacy and avoid the possibility of violating the law.

Directors (including independent directors) who wish to pursue further education: In accordance with the provisions of the "Important Points for Further Education for Directors and Supervisors of Listed Companies".

Education for Directors and Supervisors of Listed Companies".	Education for Directors and Supervisors of Listed Companies".	Education for Directors and Supervisors of Listed Companies".	Education for Directors and Supervisors of Listed Companies".	Education for Directors and Supervisors of Listed Companies".	Education for Directors and Supervisors of Listed Companies".	Education for Directors and Supervisors of Listed Companies".	Education for Directors and Supervisors of Listed Companies".
Title Name Date of Taking Office Date of Continuing Studies Organizer Name of the Course Hours Start End
Independ HSIAO, 2018/06/1 2020/12/2 1 2020/12/2 1 Securities and Futures Institute Money Laundering Prevention and Counter Terrorism Practice Study 3.0
ent Director MIN-C HIH 2			2020/12/1 7 2020/12/1 7 Securities and Futures Institute Analysis and case study of unconventional transactions of directors and supervisors 3.0
Independ ent Director	HSU,J UI-MA O	2018/06/1 2	2021/01/0 5	2021/01/0 5	Association for Sustainable Development of the Republic of China	2020 Taiwan Sustainable Finance Forum - Building a Sustainable Finance Ecosystem	3.0

(7) Implementation of risk management policies and risk measurement standards: The risk management and measurement standards of the Company are consolidated by the Office of the Chairman and the relevant units of the Finance Committee, which are responsible for risk management policies and implementation of risk measurement.

(8) Implementation of customer policies: The Company has established systems for employees to follow in accordance with relevant laws and regulations in its daily operations, and has a legal unit to assist in handling business or customer rights and interests complaints, and an audit unit to check and disclose them in accordance with procedures. (9) The Company purchases liability insurance for all directors and managers: During their term of office, the directors and managers of the Company have authorized the Board of Directors to purchase liability insurance for the scope of their business to the extent that they are legally liable. (10) The Company has established internal procedures for handling material information and keeps the latest information on the Company's website for stakeholders to understand the operation of corporate governance.

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• (11) Succession planning for the Company's board of directors and middle and senior management:

• 1.The Company adopts a candidate nomination system for the election of directors, and the shareholders elect the directors from the list of director candidates. Currently, the directors are nominated by major shareholders and elected by the shareholders' meeting. Each director is equipped with professional competencies in management, industry knowledge and international perspective. During their term of office, annual refresher courses are arranged to assist directors in acquiring the necessary professional knowledge to perform their duties.

• 2.In order to meet the needs of sustainable management and to ensure the smooth succession of middle and senior management talents, our company has divided the selected training model into four modules: management ability, professional ability, personal development and job rotation, which include human resources, financial risk, overseas dispatch, EMBA and language learning. The achievement of the annual work objectives of the foster care candidates will be included in the regular work appraisal in accordance with the "Appraisal Regulations" and the regular work appraisal will be used as the basis for assessing the year-end performance.

• 3.In 2020, we provided internal training courses for middle and senior executives, mainly 27 interviews with vice presidents from practical work management and 147 interviews on the seven habits of efficient people.

• (IX) According to the latest result of the Corporate Governance Evaluation System by the Corporate Governance Center of TWSE, explain the amendments or propose the priority measurements to the unimproved items. The results of the “Corporate Governance Review” for the year 2020 were 36%-50%. For the following items not scored items, the following is stated.

• Uploading the English version of the Notice of Meeting of Shareholders, the Handbook, the Annual Report of Shareholders and the Annual Financial Report: The above information was prepared in English in 2021 which will be uploaded within the prescried due day..

• Whether the Company has an intellectual property management plan that is linked to its operational objectives: The Company expects to formulate a plan and report to the Board of Directors in 2021.

• Establishment of information security risk management framework, information security policies and specific management plans: The Company expects to formulate relevant measures and report to the Board of Directors in 2021.

Other outstanding issues will be improved gradually depending on the company's planning.

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Note 1: Independence criteria of accountant

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Independence Yes No
1.Does the accountant not serve as a director or independent director of the Company or its affiliates? P
2.Is the accountant not a shareholder of the Company or a related company? P
3.Is the accountant not on the payroll of the Company or a related company? P
4.Has the accountant not provided audit services to the Company for more than seven consecutive years? P
5.Does the accountant confirm that his or her joint accounting firm has complied with the relevant independence standards? P
6.Has the CPA's co-practicing accountant not held any position as a director or manager of the Company or had any significant influence on P
the audit within one year after he/she left the office of the CPA's co-practicing accountant?
7.Whether the non-audit service fees and services provided by the CPA firm during the financial reporting period did not violate the relevant P
independence standards.
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Note 2: Board members implement diversity policies and have the necessary competencies to carry out their duties.

1. Individual members possess the necessary competencies to perform their duties as follows.

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Independent
Director’s
Years of
Concurr Taking Office Busine Accounti Crisis Industria Internatio
ng and Business Industry Experience
Gend ent Les Mor ss Managem l nal Leaders Policy-mak
Title Name Age [National] financial Managem / Professional
er ity Employe s 3 to e judgme ent Knowled Market hip ing ability
analysis ent Competence
e tha 9 than nt Capability ge View
skills
n 3 yea 9
yea rs year
rs s
Business
Chairman [CHOU,YEOU-YI] Male >50 R.O.C. P P P P P P P P Management
H Electrical
Components
Vice Electrical
P P P P P P P P
Chairman [CHEN,HSIN-YI Male >50 R.O.C.] Components
TV/electrochemical
Directors HSIEH,SHIH-FU Male >50 R.O.C. P P P P P P P P
s
Directors [FANG,YI-HSIUN] Male >50 R.O.C. P P P P P P P P Manufacturing/Elec
G trical Components
Directors CHOU,CHUN-KU Male <50 R.O.C. P P P P P P P P P Electrical
ANG Components
Electrical
Directors [CHOU,CHUN-HSI] Male <50 R.O.C. P P P P P P P P P
EN Components
Independ
Industrial
ent LIU,CHUN Male >50 R.O.C. P P P P P P P P P
Computers
Director
Independ
ent HSIAO,MIN-CHI Male >50 R.O.C. P P P P P P P P P Steel Pipe Industry
H
Director
Independ
ent HSU,JUI-MAO Male >50 R.O.C. P P P P P P P P P Financial Industry
Director
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(1) 22% of directors with employee status

(2) Independent directors accounted for 33%

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• (6) If the Company has a compensation committee, it shall disclose its composition, duties and operations.

• The Company currently has a compensation committee in accordance with the “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies”.

• 2.Three members of the Committee shall serve as members of the fourth term of the Committee.

The list/resume is as follows

• 3.The duties of the Committee are to establish and regularly review policies, systems, standards and structures for the evaluation of the performance and compensation of directors and managers, and to regularly evaluate and set the compensation of directors and managers. The proposal will be submitted to the Board of Directors for discussion. (1) Information on Members of Compensation Committee

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Meets One of the Following
Professional Qualification
Independence Criteria (Note 2)
Requirements, Together with at Least
Five Years’ Work Experience
An
instructor
or higher Number of Other
position in a A judge, public Public
prosecutor,
Criteria department Has work Companies in
attorney,
of experienc
Certified Public Which the
commerce, e in the
Title law, Accountant, or areas of Individual is Remar
other
finance, commerc k
(Note 1) accounting, professional or e, law, Concurrently
technical
or other specialist who finance, Serving as an
academic or
department has passed a accountin 1 2 3 4 5 6 7 8 9 10 Remuneration
national
Name related the to examination g, otherwise or Committee
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Independe HSU,JUI P P P P P P P P P P P 1
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nt Director UN
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Note 1: Please enter your status as a director, independent director or other.

Note 2: Please tick the corresponding boxes with “ü” that apply to a member during the two years prior to being elected or during the term(s) of office.

• �1�Not an employee of the Company or any of its affiliates.

• �2�Not a Director or Supervisor of the Company or its affiliates, (however, this does not apply, in case where the person is concurrently working as an Independent Director of the Company or its parent company, subsidiary or subsidiary of the same parent company established according to this Act or local country ordinances).

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• �3�Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of 1% or more of the total number of outstanding shares of the Company, or ranking in the top 10 in holdings.

• �4�Not a spouse, second-degree relative or third-degree relative of the managers in (1) or persons in (2) or (3)..

• �5�Not a director, supervisor, or employees of a corporate shareholder that directly holds five percent or more of the total number of outstanding shares of the Company or that holds shares ranking in the top five in holdings or is the representative being assigned as the director or supervisor of the Company by in accordance with Article 27, Paragraph 1 or 2 of the Company Act, (However, this does not apply, in case where the person is concurrently working as an Independent Director of the Company or its parent company, subsidiary or subsidiary of the same parent company established according to this Act or local country ordinances).

• �6�Not a director, supervisor or employee of other company which has over half of the number of directors’ seats or shares with voting rights of the Company and is controlled by the same person (however, this does not apply, in case where the person is concurrently working as an Independent Director of the Company or its parent company, subsidiary or subsidiary of the same parent company established according to this Act or local country ordinances).

• �7�Not a director, supervisor or employee of other companies or institution which concurrently works as or in a spouse relationship to the chairman, general manager or personnel of relative duties of the Company (however, this does not apply, in case where the person is concurrently working as an Independent Director of the Company or its parent company, subsidiary or subsidiary of the same parent company established according to this Act or local country ordinances).

• �8�Not a director, supervisor, manager or a shareholder holing five percent or more of the shares of a company or institution that has a business or financial relationship with the Company, (however, this does not apply, in case where the specific company or institution holds over 20% but less than 50% of the total number of issued shares of the Company and the person is concurrently working as an Independent Director of the Company or its parent company, subsidiary or subsidiary of the same parent company established according to this Act or local country ordinances).

• �9�Not a professional who provides auditing, nor a professional who provides commercial legal, financial, accounting, or consulting services to the Company or its affiliates with the cumulated remuneration within the last two years less than NT$500,000, nor is an owner, partner, director, supervisor, or manager, or the spouse of any of the above, of a sole proprietorship, partnership, company, or organization that provides such service to the Company or its affiliates, however, this does not apply for members of compensation committee, public acquisition audit committee or special committee for merger who exercise power in accordance with relevant laws and regulations in Securities and Exchange Act or Business Mergers and Acquisitions Act.

• �10�Not been a person of any conditions defined in Article 30 of the Company Act.

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• (2) Information on the Implementation Status of the Remuneration Committee

• There are 3 members in the Remuneration Committee.

• (2) Terms of Office of the current members: from June 12, 2018 to June 11, 2021. A total of 2 Remuneration Committee meetings (A) were held in the recent period. The qualification and attendance record of the Remuneration Committee members was as follows:

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Attendance
Attendance Rate
Title Name in Person By Proxy Remarks
(%) (B/A) (Note)
(B)
Convener LIU,CHUN 2 0 100
Independent HSU,JUI-MAO 0
2 100
Director
Independent HSIAO,MIN-CHIH 0
2 100
Director
Other mentionable items:
1. If the Board does not adopt or amend the recommendations of the Compensation Committee:
None
2. Resolutions of the remuneration committee objected to by members or subject to a qualified
opinion and recorded or declared in writing, the date of the meeting, session, content of the
motion, all members’ opinions and the response to members’ opinion should be specified: In the
most recent year, no member of the Remuneration Committee had any objection or reservation
to the resolution of the Remuneration Committee: None.
3. Duties of Compensation Committee:
(1) The Compensation Committee of the Company regularly reviews the policies, systems,
standards and structures of performance and compensation of the Company's directors and
managers on an annual basis.
(2) Periodically review the Company's compensation practices and propose amendments.
(3) Periodically evaluate the compensation of directors and managers of the Company.
4. The reasons for the discussion of the Compensation Committee, the results of the resolution and
the Company's handling of the opinions of the members
The Company’s
Handling of the
Meeting Date Content of the proposal and follow-up
Resolution Opinions of
(Period) handling
Remuneration
Committee
Submitted to the
March 20 All compensation
2019 Schedule of Earnings Distribution for board of directors and
(4th Committee committee members
Employees and Directors approved by all
4th Meeting) agreed to approve
directors present
Submitted to the
August 12 All compensation
“Review the proposal on the Company’s board of directors and
(4th Committee committee members
Manager’s 2020 compensation proposal” approved by all
5th Meeting) agreed to approve
directors present
Submitted to the
March 22 2020 Schedule of Earnings Distribution for All compensation
board of directors and
(4th Committee Employees and Directors committee members
approved by all
6th Meeting) Review of the new incentive plan agreed to approve
directors present
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Note:

• (1) The actual attendance rate (%) is calculated based on the number of meetings of the

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Compensation Committee and their actual attendance during their employment.

• (2) If there is a re-election of the Compensation Committee before the end of the year, both the new and old members of the Compensation Committee should be listed, and the date of re-election should be indicated in the Remarks column as the old, new or re-elected member. The actual attendance rate (%) is calculated based on the number of meetings of the Compensation Committee and their actual attendance during their employment.

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(7) Deviations from “the Corporate Social Responsibility Best Practice Principles” and Reasons.

(7) Deviations from “the Corporate Social Responsibility Best Practice Principles” and Reasons.	(7) Deviations from “the Corporate Social Responsibility Best Practice Principles” and Reasons.	(7) Deviations from “the Corporate Social Responsibility Best Practice Principles” and Reasons.	(7) Deviations from “the Corporate Social Responsibility Best Practice Principles” and Reasons.	(7) Deviations from “the Corporate Social Responsibility Best Practice Principles” and Reasons.
Evaluation Item Implementation Status Deviations from “the Corporate Social Responsibility Best Practice Principles” and Reasons Yes No Abstract Illustration
1. Has the Company conducted risk assessment on environmental, social and corporate governance issues related to business operations of the Company in accordance with the concept of materiality and established relevant risk management policies or strategies? � The Company has established a code of corporate social responsibility practices, which was approved by the Board of Directors on March 23, 2015. None.
2. Has the Company set up a dedicated (or concurrent) corporate social responsibility promotion unit which is authorized by the board of directors to be managed by the high-level management and reports to the board of directors? � The Company has established a corporate social responsibility code of practice, and the General Management Department is responsible for the promotion of CSR and reports to the Board of Directors on its handling. None.
3. Environment issues (1) Has the Company established an appropriate environmental management system according to its industrial characteristics? (2) Is the Company committed to improving the efficiency in the use of resources, and the use of recycled materials with low environmental impact? (3) Has the Company assessed the current and future potential risks and opportunities to the enterprise due to climate change and adopted countermeasures on issues related to the climate?	� � �		The Company is committed to the goal of environmental sustainability by complying with environmental laws and regulations and the relevant international standards. (1) The Company has conducted environmental management in accordance with the Waste Disposal Act and the regulations on energy conservation and carbon reduction. (2) The Company has implemented waste separation and recycling of recyclable resources and entrusted professional waste removal organizations to collect waste to reduce the impact on the environment. (3) The Company is not a manufacturing company and is exposed to potential environmental and operational risks, such as shortage of resources,	The Company has implemented the rules in accordance with the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies without significant differences.

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Implementation Status Deviations from “the
Corporate Social
Evaluation Item
Yes No Abstract Illustration Responsibility Best Practice
Principles” and Reasons
increased costs of raw materials, instability in
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Evaluation Item	Yes	No	Implementation Status Abstract Illustration	Deviations from “the Corporate Social Responsibility Best Practice Principles” and Reasons
			increased costs of raw materials, instability in
(4) Has the Company conducted statistics on the emission of greenhouse gas, water consumption volume and the total waste weight in the past two years and developed policies for energy-saving, reduction on greenhouse gas, water consumption volume or management of other wastes?	�		the transportation process, and extreme weather conditions that threaten the lives of employees, which may have a direct impact on the Company's operations and increase losses. (4) The Company is a professional semiconductor distributor and has no concerns that the production process will pollute the environment. Its environmental management and maintenance are mainly promoted through the management department and the cooperation of each unit, and the policies are as follows. 1.Paper saving. (1) Promote the electronicization of document forms and processes to reduce the use of paper. (2) Promote double-sided printing; set up waste paper recycling bins to facilitate reuse of the reverse side of the paper. 2.Electricity saving. (1) Replace energy-consuming lamps and lanterns: energy-saving LED applications are the main products. (2) Summer air conditioning temperature setting: the temperature is set to 26-28 degrees, and pay attention to whether the doors and windows are closed. (3) Promote office lights off during lunch break to save 1 hour. (4) Encourage colleagues to use the stairs more often and take the elevator less often. 3. Water conservation: (1)Installing water-saving devicesinthe pantry and

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Implementation Status Deviations from “the
Corporate Social
Evaluation Item
Yes No Abstract Illustration Responsibility Best Practice
Principles” and Reasons
mopping room faucets to reduce water output and
avoid wasting water resources.
4.Total greenhouse gas emissions, water consumption
and waste for the last two years
Weight:
Greenhouse Gas Emissions
Invent Use of Calculation Emissions Increase Increas
o electricity standard (metric (decrease) e
r (degrees) (kg/degree) tons) (metric (decrea
se)
tons)
y
%
Year
0.509
2020 1,139,011 579.76 7.70 1.35%
(Note 1)
2019 1,123,879 0.509 572.05 (19.39) (3.28)%
Note 1: Calculated based on the power emission coefficient
standard in 2019.
Note 2: Due to the impact of the COVID-19 epidemic, there is a
policy of split-level offices in order to maintain a proper
social distance between employees in the office, resulting
in a slight increase in electricity consumption compared to
the previous period.
Inventory Water consumption Total waste
Year (degrees) (metric tons)
2020 7,160 27.45
2019 5,986 27.04
We will promote energy saving and carbon
reduction from time to time, turn off unnecessary
power supply, save water and paper, etc. We hope to
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Implementation Status Deviations from “the
Corporate Social
Evaluation Item
Yes No Abstract Illustration Responsibility Best Practice
Principles” and Reasons
achieve the negative growth target of reducing
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Evaluation Item	Yes	No	Implementation Status Abstract Illustration	Deviations from “the Corporate Social Responsibility Best Practice Principles” and Reasons
			achieve the negative growth target of reducing
4. Social issues (1) Has the Company formulated relevant management policies and procedures in accordance with relevant laws and regulations and international human rights conventions? (2) Has the Company established and implemented reasonable employee welfare measures (including remuneration, vacations and other welfares, etc.) and reflected management performances or outcomes on employees’ remuneration? (3) Does the Company provide a safe and healthy working environment for employees and regularly carry out safety and health education for employees?	� � �		greenhouse gas emissions by 2~3% compared to the previous year. The Company protects the legal rights and interests of its employees in accordance with the Labor Standards Law and other labor regulations. (1) We will provide timely information to our employees, and in addition to the rights protected by law, we will also provide other benefits to our employees, such as pensions, medical and accident insurance, or training and education subsidies; the appointment and dismissal of relevant employees and their salaries will be carried out in accordance with the Company's relevant practices to protect the basic rights of our employees. (2) The Company provides various welfare measures for employees in accordance with the Labor Standards Law and related laws and regulations, and provides market competitive benefits to motivate employees, in addition to regular appraisals and performance bonuses to share the results of earnings with colleagues. (3) The Company conducts annual employee health checks, regular workplace fire inspections, and access control with magnetic cards and electronic security to provide a safe and healthy work environment for employees, and conducts the "Labor Safety and Health Education Series"	The Company has implemented the rules in accordance with the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies without significant differences.

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Evaluation Item			Implementation Status Deviations from “the Corporate Social Responsibility Best Practice Principles” and Reasons Abstract Illustration	Implementation Status Deviations from “the Corporate Social Responsibility Best Practice Principles” and Reasons Abstract Illustration
	Yes No
(4) Has the Company developed an effective training program for employees? (5) Regarding the health and safety of products and services, customers’ privacy, marketing and labelling, has the Company complied with relevant regulations and international principles and developed relevant policy and compliant procedure to protect consumers’ rights and interests? (6) Has the Company established management policy for suppliers and asked the suppliers to comply with environmental friendly, occupational safety or labor rights and present its implementations?	� � �		education and training, and the specific implementation details for FY109 are listed in the table below. Item Implementatio n Date Remarks Working environment fire inspection 2020.02.24 1 time per year Building public safety inspection 2020.10.20 1 time per year Fire Drill Education Training 2020.09.19 Disaster Drill for Information Personnel Staff Health (Health Check, Medical Consultation) 2020.05.30-07.04 2020.12.28 Health check for all employees Doctor's Consultation (4) The company will fill out a training plan form when hiring new employees and give training and planning according to the medium and long term. (5) The Company has taken out product liability insurance to ensure consumers' rights and interests. Consumers can file complaints through the customer service hotline or customer service mailbox, and the Company also provides information on corporate governance and other related contents through the Company's website for the investmentpublic's consideration,and

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Evaluation Item	Implementation Status Deviations from “the Corporate Social Responsibility Best Practice Principles” and Reasons Yes No Abstract Illustration
	has a dedicated email address to handle complaints about the Company and reply to related questions. (6) As a professional semiconductor distributor, the Company evaluates the past background and corporate image of suppliers before acting as an agent for product lines to ensure that the supply of raw materials meets the requirements of environmental restricted substances management regulations and maintains good relationships with suppliers. No major social responsibility violationshave occurred.
5. Has the Company referenced the international principles or guidelines for preparing generalized report to prepare its non-financial reports such as corporate social responsibility reports? Has the Company obtained confirmation or guarantee opinions from third-party verification agencies regarding the aforementionedreport?	� The Company discloses information related to the fulfillment of social responsibility through the Company's website and the Market Observation Post System (MOPS), enhances the disclosure of relevant information, and explains the circumstances related to the promotion of CSR in the annual report, and discloses the relevant regulations on the Company's website and theMOPS. None.
6. If the Company has its own corporate social responsibility in accordance with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, please describe the difference between its operational and prescribed code: No difference. The Company has established a Code of Corporate Social Responsibility, which was approved by the Board of Directors on March 23, 2015. Its operation is not materially different from the Code of Conduct, and the spirit of its operation and governance is in compliance with the Code of Conduct, and the relevant regulations are disclosed on the Company’s website and the Market Observation Post System. In addition, the Company actively practices corporate social responsibility in order to meet the international trend of balancing environmental, social and corporate governance development, and to enhance national economic contribution, improve the quality of life of employees, communitiesand societythroughcorporate citizenship,and promoteacompetitiveadvantage based oncorporateresponsibility.
7. Other important information about the Company that is useful in understanding the operation of corporate governance: The Company performs environmental protection, community participation, social contribution, social services, social welfare, consumer rights, human rights, safety and health, and other social responsibility activities in accordance with the Company's CSR Code of Practice and fulfills its corporate social responsibilityin accordance with relevant laws and regulations.

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(8) The and the Subsidiaries’ Ethical Corporate Management Best-Practice, Deviations from “the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons: The Company has always operated in accordance with the principle of integrity and has followed the relevant laws and regulations and internal control system to operate in good faith.

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Implementation Status Deviations from “the
Ethical Corporate
Management
Evaluation Item
Yes No Abstract Illustration Best-Practice Principles
for TWSE/TPEx Listed
Companies” and Reasons
----- End of picture text -----

Evaluation Item	Yes	No	Abstract Illustration	Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
1. Establishment of ethical corporate management policies and programs (1) Does the company formulate its ethical corporate management policies approved by the Board of Directors and declare its ethical corporate management policies and procedures in its guidelines and external documents, as well as the commitment from its board and senior management to implement the policies? (2) Does the company establish evaluation system for the risk of unethical conducts, regularly analyze and evaluate the operating activities with the risk of high-potential unethical conducts within its operating scope and formulate prevention programs and precaution measures against unethical conducts or listed activities stated in Article 2, Paragraph 7 of the “Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies”? (3) Does the company establish clear statements regarding relevant procedures, guidelines of conduct, punishment for violation, and rules of appeal in its prevention programs against unethical conducts, ensure	� � �		(1) The company has established Ethical Corporate Management Best Practice Principles. In addition, the Company has also revised the Code of Ethical Conduct, which was approved by the Board of Directors on March 23, 2015. (2) In the course of its operations, the Company has implemented the management policy of integrity and has been actively implementing the operational management requirements of the Board of Directors and the management. (3) The company regulates the newcomers to sign an employee commitment when reporting to the company, requiring all colleagues to comply with theprinciple of honesty,integrityand	None. None. None.

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Implementation Status Deviations from “the
Ethical Corporate
Management
Evaluation Item
Yes No Abstract Illustration Best-Practice Principles
for TWSE/TPEx Listed
Companies” and Reasons
its implementation, and regularly review and revise the self-discipline work to avoid any illegal
aforementioned programs? behavior
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Evaluation Item Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons Yes No Abstract Illustration	Evaluation Item Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons Yes No Abstract Illustration	Evaluation Item Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons Yes No Abstract Illustration	Evaluation Item Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons Yes No Abstract Illustration	Evaluation Item Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons Yes No Abstract Illustration
its implementation, and regularly review and revise the aforementionedprograms? self-discipline work to avoid any illegal behavior
2. Fulfill ethical management (1) Does the company evaluate business partners’ ethical records and include ethics-related clauses in business contracts? (2) Does the company establish an exclusively dedicated unit supervised by the Board to be in charge of the promotion of corporate ethical management, regularly (at least once a year) report its ethical management policies and prevention programs against unethical conducts, and supervise its implementations? (3) Does the company establish policies to prevent conflicts of interest and provide appropriate communication channels, and implement it?	� � �		(1) The Company has agreed to the sunshine integrity and anti-bribery clauses in the form of commercial terms and conditions or pledges to our suppliers and customers to eliminate improper practices and establish a good cooperation relationship for coexistence and development. (2) The Company has established Ethical Corporate Management Best Practice Principles, and the Finance Department is responsible for the promotion of ethical corporate governance and reports to the Board of Directors on its handling. (3) The Company's personnel shall recuse themselves from any conflict of interest in the execution of business, and the relevant regulations are set forth in the "Code of Ethical Conduct" as a policy to prevent conflicts of interest.	None. None. None.

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Evaluation Item Implementation Status Deviations from “the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons Yes No Abstract Illustration	Evaluation Item Implementation Status Deviations from “the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons Yes No Abstract Illustration	Evaluation Item Implementation Status Deviations from “the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons Yes No Abstract Illustration	Evaluation Item Implementation Status Deviations from “the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons Yes No Abstract Illustration	Evaluation Item Implementation Status Deviations from “the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons Yes No Abstract Illustration
(4) Has the company established effective systems for both accounting and internal control to facilitate ethical corporate management? Does the company’s internal audit unit prepare relevant audit plans based on the evaluation results of risk of the unethical conducts from the internal audit unit? Is the compliance of prevention program against unethical conducts audited by either internal auditors or CPAs? (5) Does the company regularly hold internal and external educational trainings on ethical management? � � (4) The accounting and internal control systems established by the Company for the purpose of operating with integrity are in accordance with the relevant laws and regulations, and are operated effectively through the performance of internal and external audit functions. (5) The Human Resources Department will hold internal and external education training regularly. None. None.
3.Operation of the company’s complaint system (1) Does the company establish both a specific complaint and reward system and a convenient complaint channel? Can the accused be reached by an appropriate person for follow-up? (2) Does the company establish standard operating procedures for investigating accusation cases, and follow-up measures and relevant confidential system to be adopted after the completion of the investigation? (3) Does the company provide proper whistleblower protection?	� � �		The Human Resources Department of the Company is responsible for establishing work rules and related personnel regulations, and establishing appropriate reporting channels. If an employee violates the rules of honest management, he or she will be disciplined according to the seriousness of the case, and the identity of the complainant will not be disclosed.	None.

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Implementation Status Deviations from “the
Ethical Corporate
Management
Evaluation Item
Yes No Abstract Illustration Best-Practice Principles
for TWSE/TPEx Listed
Companies” and Reasons
4. Strengthening information disclosure The Company's website has a special area for None.
(1) Does the company disclose its ethical corporate � investors, in which information about corporate
management policies and the results of its governance-related organizations and important
implementation on the company’s website and company regulations are disclosed on the
MOPS? Company's website for stakeholder inquiries. The
information will be disclosed on the Company's
website and on the Market Observation Post
System.
The Company has a dedicated department
responsible for maintaining the information
content of the Company's website on a regular
basis so that the website can fully disclose
information related to the Company's integrity and
corporate governance operations.
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1. If the company has established the ethical corporate management policies based on the “Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies”, please describe any discrepancy between the policies and their implementation:

On March 24, 2014 and March 23, 2015, the Company’s Board of Directors approved the “Ethical Corporate Management Best Practice Principles" and "Code of Ethical Conduct", respectively, and disclosed the related regulations on the Company's website and the Market Observation Post System. Based on the management philosophy of integrity, transparency and accountability, we have established an integrity-based policy and set out clearly and thoroughly in the Code of Conduct a program to prevent dishonest behavior, including operating procedures, behavioral guidelines and education and training, so as to establish a good corporate governance and risk control mechanism and create a sustainable business environment.

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Implementation Status	Deviations from “the
Evaluation Item Yes No Abstract Illustration	Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
6. Other important information to help understand the operation of the Company's integrity management (such as the Company's review and
amendment of the Company's code of ethical conduct): The Company has established a code of ethical conduct and an additional code of ethical
conduct, and keeps an eye on the development of domestic and international codes of ethical conduct and reviews and improves them in order to
enhance the effectiveness of the Company's integritymanagement.

• (9) If the Company has established a code of corporate governance and related regulations, it should disclose its inquiry methods. In the Investor Zone of the Company's website, a corporate governance section is set up and the articles of incorporation, the election of directors and supervisors, and the rules and regulations of the shareholders' meeting are placed for investors to inquire.

• (10) Other Important Information for the Enhancing the Understanding of the Company’s Corporate Governance Operations may be disclosed: The Company will promptly disclose material information and corporate presentation information, and will post the relevant information on the Market Observation Post System and the Company's website.

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(11) Implementation Status for Internal Control System

1. Statement of Internal Control

Zenitron . Corporation Internal Control System Statement

Date: March 22, 2021

In 2020, the Company conducted an internal audit of its internal control system and hereby declares the following: 1. The Company acknowledges and understands that the establishment, enforcement and maintenance of the internal control system are the responsibility of the Board of Directors and management, and that the company has already established such a system. The aim of the system is to provide reasonable assurance of the achievement of objectives in the effectiveness and efficiency of operations (including profits, performance, and safeguard of asset security), reliability, timeliness, and transparency of reporting, and compliance with applicable laws and regulations.

1. There are inherent limitations to even the most well designed internal control system. As such an effective internal control system can only reasonably ensure the achievement of the aforementioned goals. Moreover, the operating environment and situation may change, impacting the effectiveness of the internal control system. However, self-supervision measures were implemented within the Company’s internal control policies to facilitate immediate rectification once procedural flaws have been identified. 3. The Company judges the design and operating effectiveness of its internal control system based on the criteria provided in the Regulations Governing the Establishment of Internal Control Systems by Public Companies (hereinafter referred to as the “Regulations”). The criteria introduced by the “Governing Regulations” cover the process of management control and consist of five major elements, each representing a different stage of internal control: 1. Control environment, 2. Risk assessment, 3. Control activities, 4. Information and communications, and 5. Monitoring activities. Each of the elements in turn contains certain audit items. Please refer to “Governing Regulations” for details. 4. The Company has adopted the aforementioned measures for an examination of the effectiveness of the design and implementation of the internal control system. 5. Based on the findings of the aforementioned examination, the Company believes it can reasonably assure that the design and implementation of its internal control system as of Thursday, December 31, 2020 (including supervision and management of subsidiaries), including the effectiveness and efficiency in operation, reliability in financial reporting and compliance with relevant regulatory requirements, have achieved the aforementioned objectives. 6. This declaration constitutes part of the Company’s annual report and prospectus, and shall be disclosed to the public. If any fraudulent information, concealment or unlawful practices are discovered in the content of the aforementioned information, the Company shall be held liable under Article 20, Article 32, Article 171 and Article 174 of the Securities and Exchange Act. 7. This statement was passed by the Board of Directors on March 22, 2021, with none of the eight attending Directors expressing dissenting opinions, and the remainder all affirming the content of this Statement.

Zenitron . Corporation Chairman: Chou, Yeoh-Yih General Manager:Yeh, Lu-Chang

1. In case that a CPA was engaged to conduct a Special Audit of Internal Control System. its audit report shall be provided: None.

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• (12) For the most recent year and up to the printing date of the annual report, the Company and its internal personnel have been punished by law, the consequence might have material impact on the equity or stock price, hence, please specify the punishment details, and the major deficiencies and improvements: None

• (13) Significant resolutions of the shareholders’ meeting and the board of directors for the most recent year and up to the date of printing of the annual report:

• Important resolutions of the shareholders' meeting.

• Approved in the shareholders’ meeting on June 12, 2020:

• (1) Recognition of 2019 Business Report and Financial Statements

• (2) Recognition of the distribution of earnings for fiscal year 2019: Cash dividends NT$207,600,000, where NT$0.9708 per share. (Capital surplus NT$6,300,000, NT$0.0294 per share is appropriated together)

• (3) Approved revision proposal of the "Articles of Incorporation".

• Performance: The Company has appropriated earning surplus in July 2020.

• Important resolutions of the shareholders' meeting. Approved in the Board meeting on March 20, 2020:

• (1) 2019 Schedule of Earnings Distribution for Employees and Directors

• (2) 2019 Business Report and Financial Statements

• (3) 2019 Schedule of Earnings Distribution

• (4) Distribution of Cash from Capital surplus

• (5) 2020 Operating Plan

• (6) The Company’s 2019 Self-Assessment of Internal Control and Statement of Internal Control System

• (7) Amendment to the “Articles of Incorporation”

• (8) Amendment to the "Regulations Governing the Preparation of Financial Statements" of the Company

• (9) Establishment of the "Board of Directors' Performance Evaluation Method" of the Company

• (10) Assessment of the independence and suitability of the certified public accountants

• (11) To apply for or renew lines of credit, derivative financial instruments, provide endorsement guarantees and lend funds to others in order to increase working capital

• (12) Handle the matters for General Meeting of Shareholders for the year 2020

Approved in the Board meeting on March 22, 2021:

• (1) 2020 Schedule of Earnings Distribution for Employees and Directors

• (2) The new incentive plan

• (3) 2020 Business Report and Financial Statements

• (4) 2020 Schedule of Earnings Distribution

• (5) 2020 Schedule of Earnings Distribution in cash dividends

• (6) 2021 Operating Plan

• (7) The Company’s 2020 Self-Assessment of Internal Control and Statement of Internal Control System

• (8) Assessment of the independence and suitability of the certified public accountants

• (9) Financial and accounting officer changes

• (10) Establishment of the Company's Corporate Governance Officer

• (11) To apply for or renew lines of credit, derivative financial instruments, provide endorsement guarantees and lend funds to others in order to increase working capital

• (12) Re-election of Directors

• (13) Nomination of Directors and Independent Director Candidates

• (14) Release of new directors and their representatives from restrictions on working concurrently in competing companies

• (15) Handle the matters for General Meeting of Shareholders for the year 2021

• (14) For the most recent year and as of the printing date of the annual report, if the directors or supervisors have dissenting opinions on important resolutions passed by the board of directors and there are records or written statements of such dissenting opinions, the main content of which: None.

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• (15) Summary of the resignation and dismissal of the chairman, president, head of accounting, head of finance, head of internal audit, head of corporate governance, and head of research and development of the Company for the most recent year and as of the date of printing of the annual report:

Title Name Date of Taking Office Date of Dismissal Reasons for resignation or dismissal	Title Name Date of Taking Office Date of Dismissal Reasons for resignation or dismissal	Title Name Date of Taking Office Date of Dismissal Reasons for resignation or dismissal	Title Name Date of Taking Office Date of Dismissal Reasons for resignation or dismissal	Title Name Date of Taking Office Date of Dismissal Reasons for resignation or dismissal
General Manager Chou, Chun-Kuang September 1, 2017 September 1, 2020 Duty adjustment
Accounting/Financial Supervisor	Yeh, Lu-Chang	Jul. 01, 2000	Mar. 22, 2021	Duty adjustment

(IV) Information on CPA Professional Fees:

(1) Scale

(1)Scale
CPA Firm Name	CPA Name		Duration of Audit	Remark
PwC Taiwan	Chen, Chin-Chang	Lin, Yi-Fan	2020

Current & Unit: NTD$ 1,000

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

Reason for government
sponsorship Audit Exclusion Total
Scale by amount
1 Less than 2,000 P 1,770
2 2,000 (included) ~4,000
3 4,000 (included) ~6,000 P 5,400
4 6,000 (included) ~8,000
5 8,000 (included) ~10,000
6 More than 10,000 (included)
----- End of picture text -----

(2) Non-audit government sponsorship for CPA, CPA firm and its affiliates accounts for more than one fourth part of audit government sponsorship:

Currency & Unit: NTD$1,000

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

CPA CPA Audit by Non-audit government sponsorship Duration of
Firm government Remark
Name system Indutrial Human CPA audit
name sponsorship design registration resources Others Subtotal
PwC Chen, 2020/01/01
Taiwan Chin-Ch
ang 5,400 5,400
Lin, 2020/12/31
Yi-Fan
2020/01/01
570 1,200 1,770 2020/12/31 Note
----- End of picture text -----

Note: Other non-audit governmetn sponsorship: It is for the research and analysis on group transfer pricing, NT$1,000,000 and Report by Country, NT$200,000.

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• (V) Information on Replacement of Certified Public Accountants: None

• (1) About the preceding accountant: Not applicable

• (2) About the succeeding accountant: Not applicable

• (3) Reply from the previous accountant on the matters set out in Article 10, Subparagraph 6 (1) and (2)-3 of the Principles: Not applicable

• (VI) If the chairman, general manager, or manager in charge of financial or accounting matters of the Company has worked in the firm of the certified public accountant or its affiliates within the last year, the name, title, and period of employment in the firm of the certified public accountant or its affiliates should be disclosed: None.

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• (VII) 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 during the Most Recent Year or During the Current Year up to the Date of Publication of the Annual Report:

• (1) Changes in shareholdings of directors, supervisors, managers and majority shareholders:

Unit: shares

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2020 As of Apr. 13, 2021
Number of Number of
Shares pledged Shares pledged
Title Name
Increase shares Increase shares
(decrease) Increase (decrease) Increase
(decrease) (decrease)
Chairman CHOU,YEOU-YIH 0 0 0 0
Director and Vice Chairman CHEN,HSIN-YI 0 0 0 0
Directors FANG,YI-HSIUNG 0 0 0 0
Directors HSIEH,SHIH-FU 0 0 0 0
Yutseng Investment Co.,
Directors 0 0 0 0
Ltd.
Representative of Director and
CHOU,CHUN-KUANG 0 0 0 0
CEO
Directors Zenitex Investment Co., Ltd. 0 0 0 0
Representative of Director and
CHOU,CHUN-HSIEN 0 0 0 0
CEO
General Manager YEH,LU-CHANG 0 0 0 0
General Manager of Business
YEH,JUNG-HUI 0 0 0 0
Group
General Manager of Business
CHANG,CHANG-FU 0 0 0 0
Group
Deputy General Manager LIU,YING-TSO 0 0 0 0
Deputy General Manager CHEN,TING-HUANG 2000 0 0 0
Senior Deputy General Manager LI,CHUNG-HSING 0 0 0 0
Independent Director LIU,CHUN 0 0 0 0
Independent Director HSIAO,MIN-CHIH 0 0 0 0
Independent Director HSU,JUI-MAO 0 0 0 0
----- End of picture text -----

• (2) Information on the transfer of shares: The Company’s directors, supervisors and 10% shareholders transfer their shares to the general investing public through the centralized securities market.

• (3) Information on pledge of equity interest: None.

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(VIII) Information on the Relationship between any of the top Ten Shareholders (Related Party, Spouse, or Kinship within the Second Degree)

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

Apr. 13, 2021; Unit: shares; %
THE NAMES AND
RELATIONSHIPS OF
R
THE TOP TEN
E
SPOUSE & SHAREHOLDERS WHO
OWN SHAREHOLDING M
MINOR ARE RELATED PARTIES
SHAREHOLDIN BY NOMINEE A
SHAREHOLDIN OR WHO ARE RELATED
G ARRANGEMENT R
GS TO EACH OTHER AS
K
SPOUSES OR SECOND
NAME (NOTE 1) S
DEGREE RELATIVES.
(NOTE 3)
Share
holdin
Share Share
Number g Number Number of
holdin holdin Name Relation
of shares ratio( of shares shares
g ratio g ratio
Note
2)
Zenitex Investment CHOU,C
Co., Ltd. [9,862,828 ] 4.61% 0 0.00% 0 0.00% HUN-HS
IEN Chairman of
CHOU,L the company
I-MEI-C Director of the
HEN company
Representative:
CHOU,C Director of the
CHOU,CHUN-HSI 3,557,925 1.66% 5,000 0.00% 0 0.00%
HUN-KU company
EN
ANG Supervisor of
CHOU,Y the company
EOU-YI
H
ZENIBOSS CHOU,Y
3.30% 0 0.00% 0 0.00%
CORPORATION [7,045,916 ] EOU-YI Chairman of
H the company
Representative: CHOU,C Supervisor of
5,192,074 2.43% 9,552 0.00% 0 0.00%
CHOU,YEOU-YIH HUN-KU the company
ANG
Yutseng Investment CHOU,C
Co., Ltd. [6,090,840 ] 2.85% 0 0.00% 0 0.00% HUN-KU
ANG
Chairman of
CHOU,L
the company
I-MEI-C
Director of the
HEN
company
Representative: CHOU,Y
Director of the
CHOU,CHUN-KU 3,430,502 1.60% 977,883 0.46% 0 0.00% EOU-YI
company
ANG H
Supervisor of
CHOU,C
the company
HUN-HS
IEN
CHOU,L Husband and
CHOU,YEOU-YIH 5,192,074 2.43% 9,552 0.00% 0 0.00%
I-MEI-C wife
----- End of picture text -----

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THE NAMES AND
RELATIONSHIPS OF
R
THE TOP TEN
E
SPOUSE & SHAREHOLDERS WHO
OWN SHAREHOLDING M
MINOR ARE RELATED PARTIES
SHAREHOLDIN BY NOMINEE A
SHAREHOLDIN OR WHO ARE RELATED
G ARRANGEMENT R
GS TO EACH OTHER AS
K
SPOUSES OR SECOND
NAME (NOTE 1) S
DEGREE RELATIVES.
(NOTE 3)
Share
holdin
Share Share
Number g Number Number of
holdin holdin Name Relation
of shares ratio( of shares shares
g ratio g ratio
Note
2)
HEN Father and son
CHOU,C Father and son
HUN-KU
ANG
CHOU,C
HUN-HS
IEN
CHOU,Y
Taishin
EOU-YI
International Bank Husband and
H
Trust Account - wife
CHOU,C
CHOU,LI-MEI-CH Mother and
5,000,000 2.34% 0 0.00% 0 0.00% HUN-KU
EN son
ANG
Trustee: Mother and
CHOU,C
CHOU,LI-MEI-CH son
HUN-HS
EN
IEN
Tung Ho Steel
3,825,000 1.79% 0 0.00% 0 0.00% None None
Enterprise Corp.
Representative:
HOU,CHIEH-TEN 0 0.00% 0 0.00% 0 0.00% None None
G
CHOU,Y
EOU-YI
H
Father and son
CHOU,L
CHOU,CHUN-HSI Mother and
EN [3,557,925 ] 1.66% 5,000 0.00% 0 0.00% I-MEI-C son
HEN
Brothers
CHOU,C
HUN-KU
ANG
LIU,LAI-TIEN
3,486,000 1.63% 0 0.00% 0 0.00% None None
CHOU,Y Father and son
CHOU,CHUN-KU EOU-YI Mother and
3,430,502 1.60% 977,883 0.46% 0 0.00%
ANG H son
CHOU,L Brothers
----- End of picture text -----

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NAME (NOTE 1)	OWN SHAREHOLDIN G SPOUSE & MINOR SHAREHOLDIN GS SHAREHOLDING BY NOMINEE ARRANGEMENT THE NAMES AND RELATIONSHIPS OF THE TOP TEN SHAREHOLDERS WHO ARE RELATED PARTIES OR WHO ARE RELATED TO EACH OTHER AS SPOUSES OR SECOND DEGREE RELATIVES. (NOTE 3) R E M A R K S	OWN SHAREHOLDIN G SPOUSE & MINOR SHAREHOLDIN GS SHAREHOLDING BY NOMINEE ARRANGEMENT THE NAMES AND RELATIONSHIPS OF THE TOP TEN SHAREHOLDERS WHO ARE RELATED PARTIES OR WHO ARE RELATED TO EACH OTHER AS SPOUSES OR SECOND DEGREE RELATIVES. (NOTE 3) R E M A R K S	OWN SHAREHOLDIN G SPOUSE & MINOR SHAREHOLDIN GS SHAREHOLDING BY NOMINEE ARRANGEMENT THE NAMES AND RELATIONSHIPS OF THE TOP TEN SHAREHOLDERS WHO ARE RELATED PARTIES OR WHO ARE RELATED TO EACH OTHER AS SPOUSES OR SECOND DEGREE RELATIVES. (NOTE 3) R E M A R K S	OWN SHAREHOLDIN G SPOUSE & MINOR SHAREHOLDIN GS SHAREHOLDING BY NOMINEE ARRANGEMENT THE NAMES AND RELATIONSHIPS OF THE TOP TEN SHAREHOLDERS WHO ARE RELATED PARTIES OR WHO ARE RELATED TO EACH OTHER AS SPOUSES OR SECOND DEGREE RELATIVES. (NOTE 3) R E M A R K S	OWN SHAREHOLDIN G SPOUSE & MINOR SHAREHOLDIN GS SHAREHOLDING BY NOMINEE ARRANGEMENT THE NAMES AND RELATIONSHIPS OF THE TOP TEN SHAREHOLDERS WHO ARE RELATED PARTIES OR WHO ARE RELATED TO EACH OTHER AS SPOUSES OR SECOND DEGREE RELATIVES. (NOTE 3) R E M A R K S	OWN SHAREHOLDIN G SPOUSE & MINOR SHAREHOLDIN GS SHAREHOLDING BY NOMINEE ARRANGEMENT THE NAMES AND RELATIONSHIPS OF THE TOP TEN SHAREHOLDERS WHO ARE RELATED PARTIES OR WHO ARE RELATED TO EACH OTHER AS SPOUSES OR SECOND DEGREE RELATIVES. (NOTE 3) R E M A R K S	OWN SHAREHOLDIN G SPOUSE & MINOR SHAREHOLDIN GS SHAREHOLDING BY NOMINEE ARRANGEMENT THE NAMES AND RELATIONSHIPS OF THE TOP TEN SHAREHOLDERS WHO ARE RELATED PARTIES OR WHO ARE RELATED TO EACH OTHER AS SPOUSES OR SECOND DEGREE RELATIVES. (NOTE 3) R E M A R K S	OWN SHAREHOLDIN G SPOUSE & MINOR SHAREHOLDIN GS SHAREHOLDING BY NOMINEE ARRANGEMENT THE NAMES AND RELATIONSHIPS OF THE TOP TEN SHAREHOLDERS WHO ARE RELATED PARTIES OR WHO ARE RELATED TO EACH OTHER AS SPOUSES OR SECOND DEGREE RELATIVES. (NOTE 3) R E M A R K S	OWN SHAREHOLDIN G SPOUSE & MINOR SHAREHOLDIN GS SHAREHOLDING BY NOMINEE ARRANGEMENT THE NAMES AND RELATIONSHIPS OF THE TOP TEN SHAREHOLDERS WHO ARE RELATED PARTIES OR WHO ARE RELATED TO EACH OTHER AS SPOUSES OR SECOND DEGREE RELATIVES. (NOTE 3) R E M A R K S
	Number of shares Share holdin g ratio( Note 2) Number of shares Share holdin g ratio Number of shares Share holdin g ratio Name Relation
	I-MEI-C HEN CHOU,C HUN-HS IEN
Standard Chartered International Commercial Banking is entrusted with the custody of the SPDR Portfolio Emerging Markets of the SPDR(R) Index Share Fund.	2,762,000	1.29%	0	0.00%	0	0.00%	None	None

Note 1: All of the top ten shareholders should be listed, and the names of corporate shareholders and their representatives should be listed separately if they are corporate shareholders.

Note 2: The calculation of the percentage of shareholding refers to the calculation of the percentage of shareholding in the name of oneself, one's spouse, minor children or the use of others, respectively.

Note 3: The shareholders listed in the preceding paragraph include both legal and natural persons, and the relationships between them should be disclosed in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

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(IX) The number of shares held by the Company, its directors, supervisors, managers and businesses directly or indirectly controlled by the Company in the same re-invested business and the consolidated percentage of shareholding are calculated as follows

Dec. 31, 2020

Unit: shares; %

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Directors, Supervisors, Managers and
The Company’s investment Investments in Direct or Indirectly Total investment
Re-invested businesses
Controlled Businesses
(Note 1)
Number of Shareholding Number of Shareholding
Number of shares Shareholding ratio
shares ratio shares ratio
Supertronic International
18,703,759 100.00% - - 18,703,759 100.00%
Corp.
RAYTRONIC
1,520,000 100.00% - - 1,520,000 100.00%
CORPORATION
Zenitron (HK) Limited 510,000 1.47% 34,272,648 98.53% 34,782,648 100.00%
Cordial Investment
7,700,000 100.00% - - 7,700,000 100.00%
Corporation
Zenicom (HK) Limited 23,800,000 100.00% - - 23,800,000 100.00%
Zenitron (Shanghai)
International Trading Co., -(Note) 100.00% - - -(Note) 100.00%
Ltd.
ZTHC (Shanghai) Co.,
-(Note) 100.00% - - -(Note) 100.00%
Ltd.
Zenitron (Shenzhen)
-(Note) 100.00% - - -(Note) 100.00%
Technology Co., Ltd.
Shanghai Zenitron
Electronic Trading Co., -(Note) 100.00% - - -(Note) 100.00%
Ltd.
----- End of picture text -----

Note : Limited Liability Company, no shares issued.

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IV. Capital Overview

(I) Capital and Shares

(1) Source of Capital

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

Par Authorized Capital Paid-in Capital Remark
Year/Month Value(NT Number of shares Amount Number of shares Amount Source of Share Capital Increased by Assets Other than Other
$) Capital Cash
1997 06 10 5,800,000 58,000,000 5,800,000 58,000,000 Capital increase by cash None -
NT$30,000,000
Capital increase by
cash
1997 11 10 13,700,000 137,000,000 13,700,000 137,000,000 NT$50,000,000 Capital increase None -
from retained
earnings
NT$29,000,000
1998 08 10 30,000,000 300,000,000 19,700,000 197,000,000 Capital increase by cash None -
NT$60,000,000
Capital increase by
cash
NT$103,900,000
1999
06 12 50,000,000 500,000,000 36,000,000 360,000,000 Capital increase None Note 1
from retained
earnings
NT$59,100,000
1999 Capital increase by
12 60 50,000,000 500,000,000 40,000,000 400,000,000 cash None Note 2
NT$40,000,000
Capital increase
from retained
earnings
2000 06 10 60,000,000 600,000,000 53,000,000 530,000,000 NT$120,000,000 Capital increase None Note 3
from employee
bonus
NT$10,000,000
Capital increase
from retained
earnings
2001 04 10 170,000,000 1,700,000,000 70,000,000 700,000,000 NT$159,000,000 Capital increase None Note 4
from employee
bonus
NT$11,000,000
2001 Capital increase by
45 170,000,000 1,700,000,000 80,000,000 800,000,000 cash None Note 5
05
NT$100,000,000
Issuance from
2002 Consolidated
10 170,000,000 1,700,000,000 81,330,666 813,306,660 None Note 6
06 Capital Increase
NT$13,306,660
Capital increase
from retained
earnings
2002 08 10 170,000,000 1,700,000,000 92,190,346 921,903,460 NT$97,596,800 Capital increase None Note 7
from employee
bonus
NT$11,000,000
Capital increase
from retained
earnings
2003 08 10 170,000,000 1,700,000,000 100,765,570 1,007,655,700 NT$73,752,240 Capital increase None Note 8
from employee
bonus
NT$12,000,000
Conversion of
2004 02 10 170,000,000 1,700,000,000 100,888,070 1,008,880,700 Employee Stock Options None Note 9
NT$1,225,000
Conversion of
2004 03 10 170,000,000 1,700,000,000 101,155,070 1,011,550,700 Employee Stock Options None Note 10
NT$2,670,000
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Par Authorized Capital Paid-in Capital Remark
Year/Month Value(NT Number of shares Amount Number of shares Amount Source of Share Capital Increased by Assets Other than Other
$) Capital Cash
Conversion of
2004
05 10 170,000,000 1,700,000,000 101,458,911 1,014,589,110 Corporate Bond None Note 11
NT$3,038,410
Conversion of
2004 07 10 250,000,000 2,500,000,000 101,585,911 1,015,859,110 Employee Stock Options None Note 12
NT$1,270,000
Capital increase
from retained
earnings
2004 10 250,000,000 2,500,000,000 108,983,664 1,089,836,640 NT$55,977,530 None Note 13
09 Capital increase
from employee
bonus
NT$18,000,000
Conversion of
2004 11 10 250,000,000 2,500,000,000 109,018,664 1,090,186,640 Employee Stock Options None Note 14
NT$350,000
Conversion of
2005
01 10 250,000,000 2,500,000,000 109,027,414 1,090,274,140 Employee Stock None Note 15
Options NT$87,500
Conversion of
Employee Stock
Options
NT$837,500
Capital increase
2005 from retained
09 10 250,000,000 2,500,000,000 115,862,534 1,158,625,340 earnings None Note 16
NT$53,513,700
Capital increase
from employee
bonus
NT$14,000,000
Conversion of
Employee Stock
2005 Options
10 10 250,000,000 2,500,000,000 122,766,152 1,227,661,520 NT$465,000 None Note 17
Conversion of
Corporate Bond
NT$68,571,180
Conversion of
Employee Stock
Options
NT$2,475,000
Conversion of
2006
04 10 250,000,000 2,500,000,000 171,302,029 1,713,020,290 Corporate Bond None Note 18
NT$62,524,950
Issuance from
Consolidated
Capital Increase
NT$420,358,820
Conversion of
Employee Stock
2006 Options
05 10 250,000,000 2,500,000,000 178,540,724 1,785,407,240 NT$950,000 None Note 19
Conversion of
Corporate Bond
NT$71,436,950
Conversion of
Employee Stock
Options
NT$1,420,000
2006 Conversion of
07 22 350,000,000 3,500,000,000 201,742,599 2,017,425,990 Corporate Bond None Note 20
NT$30,598,750
Capital increase by
cash
NT$200,000,000
Capital increase
2006 from retained
10 350,000,000 3,500,000,000 210,202,599 2,102,025,990 None Note 21
08 earnings
NT$84,600,000
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Par Authorized Capital Paid-in Capital Remark
Year/Month Value(NT Number of shares Amount Number of shares Amount Source of Share Capital Increased by Assets Other than Other
$) Capital Cash
Conversion of
Employee Stock
2006 Options
10 10 350,000,000 3,500,000,000 210,827,099 2,108,270,990 NT$3,550,000 None Note 22
Conversion of
Corporate Bond
NT$2,695,000
Conversion of
Employee Stock
2007 Options
01 10 350,000,000 3,500,000,000 211,198,585 2,111,985,850 NT$1,350,000 None Note 23
Conversion of
Corporate Bond
NT$2,364,860
Conversion of
2007 04 10 350,000,000 3,500,000,000 211,353,585 2,113,535,850 Employee Stock Options None Note 24
NT$1,550,000
2007 Capital reduction by
05 10 350,000,000 3,500,000,000 209,353,585 2,093,535,850 Treasury Stock None Note 25
NT$20,000,000
Conversion of
2007 07 10 350,000,000 3,500,000,000 209,608,585 2,096,085,850 Employee Stock Options None Note 26
NT$2,550,000
Conversion of
Employee Stock
2007 Options
10 350,000,000 3,500,000,000 213,318,138 2,133,181,380 NT$950,000 None Note 27
10
Conversion of
Corporate Bond
NT36,145,530
Conversion of
Employee Stock
2008 Options
01 10 350,000,000 3,500,000,000 214,519,273 2,145,192,730 NT$9,575,000 None Note 28
Conversion of
Corporate Bond
NT2,436,350
Conversion of
Employee Stock
2008 Options
04 10 350,000,000 3,500,000,000 210,804,273 2,108,042,730 NT$2,850,000 None Note 29
Capital Reduction
by Treasury Stock
NT$ 40,000,000
Conversion of
2008 07 10 350,000,000 3,500,000,000 211,134,273 2,111,342,730 Employee Stock Options None Note 30
NT$3,300,000
Conversion of
2008 10 10 350,000,000 3,500,000,000 211,161,773 2,111,617,730 Employee Stock Options None Note 31
NT$275,000
2008 Capital Reduction
12 10 350,000,000 3,500,000,000 206,161,773 2,061,617,730 by Treasury Stock None Note 32
NT$ 50,000,000
Conversion of
2009 08 10 350,000,000 3,500,000,000 206,266,773 2,062,667,730 Employee Stock Options None Note 33
NT$1,050,000
Conversion of
2009 10 10 350,000,000 3,500,000,000 206,545,523 2,065,455,230 Employee Stock Options None Note 34
NT$2,780,750
Conversion of
Employee Stock
2009 Options
12 10 350,000,000 3,500,000,000 209,536,151 2,095,361,510 NT$15,450,000 None Note 35
Conversion of
Corporate Bond
NT$14,456,280
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Par Authorized Capital Paid-in Capital Remark
Year/Month Value(NT Number of shares Amount Number of shares Amount Source of Share Capital Increased by Assets Other than Other
$) Capital Cash
Conversion of
Employee Stock
2010 Options
04 10 350,000,000 3,500,000,000 210,656,947 2,106,569,470 NT$3,545,000 None Note 36
Conversion of
Corporate Bond
NT$7,662,960
Conversion of
Employee Stock
2010 Options
07 10 350,000,000 3,500,000,000 211,283,033 2,112,830,330 NT$3,000,000 None Note 37
Conversion of
Corporate Bond
NT$3,260,860
Conversion of
Employee Stock
2010 Options
10 10 350,000,000 3,500,000,000 211,439,446 2,114,394,460 NT$1,075,000 None Note 38
Conversion of
Corporate Bond
NT$489,130
Conversion of
Employee Stock
2011 Options
01 10 350,000,000 3,500,000,000 211,893,573 2,118,935,730 NT$3,400,000 None Note 39
Conversion of
Corporate Bond
NT$1,141,270
Conversion of
Employee Stock
2011 Options
10 350,000,000 3,500,000,000 212,457,594 2,124,575,940 NT$1,075,000 None Note 40
04
Conversion of
Corporate Bond
NT$4,565,210
Conversion of
Employee Stock
2011 Options
10 350,000,000 3,500,000,000 212,873,614 2,128,736,140 NT$2,065,200 None Note 41
07
Conversion of
Corporate Bond
NT$2,065,200
Conversion of
2011 10 350,000,000 3,500,000,000 213,122,864 2,131,228,640 Employee Stock None Note 42
10 Options
NT$2,492,500
Conversion of
2012 01 10 350,000,000 3,500,000,000 213,170,364 2,131,703,640 Employee Stock Options None Note 43
NT$475,000
Conversion of
2012 04 10 350,000,000 3,500,000,000 213,277,364 2,132,773,640 Employee Stock Options None Note 44
NT$1,070,000
Conversion of
2012 08 10 350,000,000 3,500,000,000 213,352,364 2,133,523,640 Employee Stock Options None Note 45
NT$750,000
Conversion of
2012 11 10 350,000,000 3,500,000,000 213,403,364 2,134,033,640 Employee Stock Options None Note 46
NT$510,000
Conversion of
2013 10 350,000,000 3,500,000,000 213,423,364 2,134,233,640 Employee Stock None Note 47
01 Options
NT$200,000
Conversion of
2013 04 10 350,000,000 3,500,000,000 213,482,614 2,134,826,140 Employee Stock Options None Note 48
NT$592,500
Conversion of
2013 10 10 350,000,000 3,500,000,000 213,538,364 2,135,383,640 Employee Stock Options None Note 49
NT$557,500
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Par Authorized Capital Paid-in Capital Remark
Year/Month Value(NT Number of shares Amount Number of shares Amount Source of Share Capital Increased by Assets Other than Other
$) Capital Cash
Conversion of
2014 01 10 350,000,000 3,500,000,000 213,583,864 2,135,838,640 Employee Stock Options None Note 50
NT$455,000
Conversion of
2014 04 10 350,000,000 3,500,000,000 213,704,364 2,137,043,640 Employee Stock Options None Note 51
NT$1,205,000
Conversion of
2014 07 10 350,000,000 3,500,000,000 213,742,364 2,137,423,640 Employee Stock Options None Note 52
NT$380,000
Conversion of
2014 10 350,000,000 3,500,000,000 213,758,614 2,137,586,140 Employee Stock None Note 53
10 Options
NT$162,500
Conversion of
2015 03 10 350,000,000 3,500,000,000 213,799,864 2,137,998,640 Employee Stock Options None Note 54
NT$412,500
Conversion of
2015 08 10 350,000,000 3,500,000,000 213,824,864 2,138,248,640 Employee Stock Options None Note 55
NT$250,000
----- End of picture text -----

Note 1: Approved by Letter (88) Tai-Tsai-Cheng (1) No. 32096 on Apr. 15, 1999

Note 2: Approved by Letter (88) Tai-Tsai-Cheng (1) No. 97993 on Nov. 9, 1999 Note 3: Approved by Letter (89) Tai-Tsai-Cheng (1) No. 43309 on May. 18, 2000 Note 4: Approved by Letter (90) Tai-Tsai-Cheng (1) No. 120516 on Apr. 23, 2001 Note 5: Approved by Letter (90) Tai-Tsai-Cheng (1) No. 123591 on May. 15, 2001 Note 6: Approved by Letter (91) Tai-Tsai-Cheng (1) No. 0910132378 on Jun. 21, 2002 Note 7: Approved by Letter (91) Tai-Tsai-Cheng (1) No. 0910145797 on Aug. 19, 2002 Note 8: Approved by Letter (92) Tai-Tsai-Cheng (1) No. 0920127502 on Jun. 20, 2003 Note 9: Approved by the Letter Ching-Shou-Shang-Tzu No. 09301014120 on Feb. 2, 2004. Note 10: Approved by the Letter Ching-Shou-Shang-Tzu No. 09301052260 on Mar. 26, 2004. Note 11: Approved by the Letter Ching-Shou-Shang-Tzu No. 09301079150 on May 10, 2004. Note 12: Approved by the Letter Ching-Shou-Shang-Tzu No. 09301131840 on Jul. 29, 2004. Note 13: Approved by the Letter Ching-Shou-Shang-Tzu No. 09301173580 on Sep. 14, 2004. Note 14: Approved by the Letter Ching-Shou-Shang-Tzu No. 09301208340 on Nov. 3, 2004. Note 15: Approved by the Letter Ching-Shou-Shang-Tzu No. 09401008660 on Jan. 24, 2005. Note 16: Approved by the Letter Ching-Shou-Shang-Tzu No. 09401182450 on Sep. 29, 2005. Note 17: Approved by the decree Ching-Shou-Shang-Tzu No. 09401205930 on Oct. 18, 2005. Note 18: Approved by the Letter Ching-Shou-Shang-Tzu No. 09501063490 on Apr. 11, 2006. Note 19: Approved by the Letter Ching-Shou-Shang-Tzu No. 09501096310 on May 25, 2006. Note 20: Approved by the Letter Ching-Shou-Shang-Tzu No. 09501154950 on Jul. 24, 2006. Note 21: Approved by the Letter Ching-Shou-Shang-Tzu No. 09501189080 on Aug. 25, 2006. Note 22: Approved by the Letter Ching-Shou-Shang-Tzu No. 09501242180 on Oct. 25, 2006. Note 23: Approved by the Letter Ching-Shou-Shang-Tzu No. 09601013870 on Jan. 18, 2007. Note 24: Approved by the Letter Ching-Shou-Shang-Tzu No. 09601079950 on Apr. 16, 2007. Note 25: Approved by the Letter Ching-Shou-Shang-Tzu No. 09601105580 on May 15, 2007. Note 26: Approved by the Letter Ching-Shou-Shang-Tzu No. 09601172310 on Jul. 23, 2007. Note 27: Approved by the Letter Ching-Shou-Shang-Tzu No. 09601254450 on Oct. 17, 2007. Note 28: Approved by the Letter Ching-Shou-Shang-Tzu No. 09701012720 on Jan. 21, 2008. Note 29: Approved by the Letter Ching-Shou-Shang-Tzu No. 09701093070 on Apr. 18, 2008. Note 30: Approved by the Letter Ching-Shou-Shang-Tzu No. 09701177430 on Jul. 31, 2008. Note 31: Approved by the Letter Ching-Shou-Shang-Tzu No. 09701265840 on Oct. 20, 2008. Note 32: Approved by the Letter Ching-Shou-Shang-Tzu No. 09701317790 on Dec. 18, 2008. Note 33: Approved by the Letter Ching-Shou-Shang-Tzu No. 09801172890 on Aug. 04, 2009. Note 34: Approved by the Letter Ching-Shou-Shang-Tzu No. 09801241310 on Oct. 22, 2009. Note 35: Approved by the Letter Ching-Shou-Shang-Tzu No. 09901012680 on Jan. 20, 2010. Note 36: Approved by the Letter Ching-Shou-Shang-Tzu No. 09901078550 on Apr. 20, 2010. Note 37: Approved by the Letter Ching-Shou-Shang-Tzu No. 09901161800 on Jul. 19, 2010. Note 38: Approved by the Letter Ching-Shou-Shang-Tzu No. 09901235730 on Oct. 19, 2010. Note 39: Approved by the Letter Ching-Shou-Shang-Tzu No. 10001013380 on Jan. 20, 2011. Note 40: Approved by the Letter Ching-Shou-Shang-Tzu No. 10001081730 on Apr. 25, 2011. Note 41: Approved by the Letter Ching-Shou-Shang-Tzu No. 10001162800 on Jul. 25, 2011. Note 42: Approved by the Letter Ching-Shou-Shang-Tzu No. 10001239440 on Oct. 18, 2012.

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Note 43: Approved by the Letter Ching-Shou-Shang-Tzu No. 10101014870 on Jan. 30, 2012. Note 44: Approved by the Letter Ching-Shou-Shang-Tzu No. 10101070610 on Apr. 19, 2012 Note 45: Approved by the Letter Ching-Shou-Shang-Tzu No. 10101160880 on Aug. 06, 2012. Note 46: Approved by the Letter Ching-Shou-Shang-Tzu No. 10101231870 on Nov. 08, 2012. Note 47: Approved by the Letter Ching-Shou-Shang-Tzu No. 10201011630 on Jan. 27, 2013. Note 48: Approved by the Letter Ching-Shou-Shang-Tzu No. 10201069480 on Apr. 17, 2013. Note 49: Approved by the Letter Ching-Shou-Shang-Tzu No. 10201213440 on Oct. 22, 2013. Note 50: Approved by the Letter Ching-Shou-Shang-Tzu No. 10301010670 on Jan. 20, 2014. Note 51: Approved by the Letter Ching-Shou-Shang-Tzu No. 10301069730 on Apr. 17, 2014. Note 52: Approved by the Letter Ching-Shou-Shang-Tzu No. 10301147750 on Jul. 17, 2014. Note 53: Approved by the Letter Ching-Shou-Shang-Tzu No. 10301218270 on Oct. 21, 2014. Note 54: Approved by the Letter Ching-Shou-Shang-Tzu No. 10401044550 on Mar. 13, 2015. Note 55: Approved by the Letter Ching-Shou-Shang-Tzu No. 10401156710 on Aug. 06, 2015.

	Apr. 13,2021 Authorized Capital R e m a r k s Issued Shares Unissued Shares Total 213,824,864 shares 136,175,136 shares 350,000,000 shares	Apr. 13,2021 Authorized Capital R e m a r k s Issued Shares Unissued Shares Total 213,824,864 shares 136,175,136 shares 350,000,000 shares	Apr. 13,2021 Authorized Capital R e m a r k s Issued Shares Unissued Shares Total 213,824,864 shares 136,175,136 shares 350,000,000 shares	Apr. 13,2021 Authorized Capital R e m a r k s Issued Shares Unissued Shares Total 213,824,864 shares 136,175,136 shares 350,000,000 shares
Type of Shares
Registered Common Stock	213,824,864 shares	136,175,136 shares	350,000,000 shares

(2) Relevant Information for Shelf Registration Form: None

(3) Status of Shareholders

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

Apr. 13, 2021
Status of Foreign
Governme Other
Shareholders Financial Institutions &
nt Juridical Individual Total
Items Institutions Natural
Agencies Persons
Persons
----- End of picture text -----

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

Status of Foreign
Governme Other
Shareholders Financial Institutions &
nt Juridical Individual Total
Items Institutions Natural
Agencies Persons
Persons
Number of
0 8 146 28,369 78 28,601
employees
Shares 0 5,135,000 33,530,393 159,282,776 15,876,695 213,824,864
Shareholding ratio 0.00% 2.40% 15.68% 74.49% 7.43% 100.00%
----- End of picture text -----

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(4) Shareholding Distribution Status

Apr. 13, 2021

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

Number of Shareholding
Shareholding level Shares
shareholders ratio
1 ~ 999 10,867 408,365 0.19%
1,000 ~ 5,000 13,054 28,530,531 13.34%
5,001 ~ 10,000 2,347 19,544,803 9.14%
10,001 ~ 15,000 701 8,976,589 4.20%
15,001 ~ 20,000 543 10,252,748 4.80%
20,001 ~ 30,000 409 10,610,795 4.96%
30,001 ~ 40,000 178 6,438,110 3.01%
40,001 ~ 50,000 120 5,614,432 2.63%
50,001 ~ 100,000 215 15,400,027 7.20%
100,001 ~ 200,000 81 11,632,414 5.44%
200,001 ~ 400,000 40 11,093,914 5.19%
400,001 ~ 600,000 15 7,453,506 3.49%
600,001 ~ 800,000 4 2,875,427 1.34%
800,001 ~ 1,000,000 4 3,674,777 1.72%
1,000,001 [and ] 23 71,318,426 33.35%
above
Total 28,601 213,824,864 100.00%
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(5) List of Major Shareholders

5) List of Major Shareholders	5) List of Major Shareholders	5) List of Major Shareholders
Apr. 13,2021 Shareholding Shareholder’s Name Shares Percentage Zenitex Investment Co.,Ltd. 9,862,828 4.61% ZENIBOSS CORPORATION 7,045,916 3.30% YutsengInvestment Co.,Ltd. 6,090,840 2.85% CHOU,YEOU-YIH 5,192,074 2.43% Taishin International Bank Trust Account - CHOU,LI-MEI-CHEN 5,000,000 2.34% TungHo Steel Enterprise Corp. 3,825,000 1.79% CHOU,CHUN-HSIEN 3,557,925 1.66% LIU,LAI-TIEN 3,486,000 1.63% CHOU,CHUN-KUANG 3,430,502 1.60% Standard Chartered International Commercial Banking is entrusted with the custody of the SPDR Portfolio Emerging Markets of the SPDR(R) Index Share Fund. 2,762,000 1.29%
Shareholding Shareholder’s Name Shares Percentage
Zenitex Investment Co.,Ltd. 9,862,828 4.61%
ZENIBOSS CORPORATION 7,045,916 3.30%
YutsengInvestment Co.,Ltd. 6,090,840 2.85%
CHOU,YEOU-YIH 5,192,074 2.43%
Taishin International Bank Trust Account - CHOU,LI-MEI-CHEN 5,000,000 2.34%
TungHo Steel Enterprise Corp. 3,825,000 1.79%
CHOU,CHUN-HSIEN 3,557,925 1.66%
LIU,LAI-TIEN 3,486,000 1.63%
CHOU,CHUN-KUANG 3,430,502 1.60%
Standard Chartered International Commercial Banking is entrusted with the custody of the SPDR Portfolio Emerging Markets of the SPDR(R) Index Share Fund.	2,762,000	1.29%

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(6) Market Price, Net Worth, Earnings, and Dividends per Share for the past two years

Unit: NT$1

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

2020
Year 2019 As of
(Distribution in
Item (Distribution in 2020) (Mar. 31, 2021)
2021)
Marke Maximum 24.45 22.45 27.80
t price Minimum 20.40 15.35 21.80
per
share Average 21.77 19.89 24.00
Earnin Before distribution 20.60 22.46 23.37
gs per
share After distribution 19.60 20.56(Note 1) 21.47 (Note 1)
Earnin Weighted Average 213,825 213,825 213,825
gs per Number of Shares thousand shares thousand shares thousand shares
share Earning Before 1.08 2.21 0.90
(Note s per adjustment
2) share After adjustment 1.08 2.21(Note 1) -
Cash dividend 1.0002 1.90(Note 1) -
Dividends from
Divide Retained - -(Note 1) -
Bonus
nds Earnings
shares
per Dividends from
Share Capital Surplus - -(Note 1) -
Accumulated
Undistributed Dividends - - -
Price / Earnings Ratio
Invest 20.16 9.00 6.67
(Note 2) (Note 5)
ment
Price / Dividend Ratio
return 21.77 10.47(Note 1) -
(Note 3)
analys
Cash Dividend Yield
is 4.59% 9.55% (Note 1) -
Rate (Note 4)
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Note 1: The resolution on the distribution of the 109 earnings has been approved by the board of directors and has not yet been recognized by the shareholders' meeting. The amount of cash dividends and bonus distribution has been approved by the board of directors and has not yet been submitted to the shareholders' meeting.

Note 2: The Price / Earnings Ratio = average closing price per share for the year / earnings per share. Note 3: The Price / Dividend Ratio = average closing price per share for the year / cash dividend per share. Note 4: The Cash Dividend Yield Rate = cash dividend per share / average closing price per share for the year. Note 5: The cost/benefit ratio for the first quarter of 2021 has been converted on a one-year basis.

(7) Dividend Policy and Implementation Status

1. Dividend Policy of the Company:

The Company's dividend policy, as set forth in the Company's Articles of Incorporation, is as follows: "The Company shall first make up prior years' deficits and pay all taxes and contributions in accordance with the law, and then set aside 10% of its legal reserve (except when the legal reserve has reached the total capitalization), and set aside or reverse the special reserve as required by law, and then set aside the remainder as distributable earnings for the year, and consolidate the undistributed earnings at the beginning of the period. The Board of Directors shall prepare a proposal for distribution and submit it to the shareholders for resolution.

Dividends are paid on the basis of at least 50% of the current year's distributable earnings, and cash and stock dividends are appropriately distributed in accordance with the Company's operating strategy and capital planning, with cash dividends paid each year being limited to no less than 20% of the actual amount of earnings distributed in that year.

The Board of Directors is authorized to distribute all or part of the dividends and bonuses payable in cash to the Company by the presence of at least two-thirds of the directors and by a

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resolution of a majority of the directors present at the latest shareholders' meeting.

When the Company has no deficit, the Board of Directors is authorized to distribute all or part of the legal reserve (exceeding 25% of the paid-in capital) and the capital reserve in accordance with the Company Law in the form of cash when two-thirds or more of the directors are present and a majority of the directors present resolve to do so and submit it to the latest shareholders' meeting.

2.Status of Dividend Payments

On March 22, 2021, the Board of Directors resolved the appropriation of earnings for the year 2020. The appropriation of earnings has not yet been recognized by the shareholders’ meeting.

3.Expected dividend policy: There were no significant changes in the Company's dividend policy.

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• (8) The effect of the proposed gratis stock allotment at the shareholders’ meeting on the Company’s operating results and earnings per share:

• The Company’s 2020 earnings distribution proposal is not applicable because there is no gratis stock allotment.

(9) Remuneration of Employees and Directors:

1. The percentage or scope of remuneration for employees, directors and Director as set forth in the Articles of Incorporation:

The percentage or scope of remuneration for The Company employees, directors and Director as set forth in the Articles of Incorporation:

If the Company makes a profit in a year, 3% to 12% should be appropriated as compensation to employees and up to 3% as compensation to directors, but if the Company still has accumulated losses, the amount of compensation should be retained before the remaining balance is appropriated. Employee compensation may be in the form of stock or cash, and may be paid to employees of affiliated companies who meet certain criteria.

1. The basis for estimating the amount of compensation to employees and Directors, the basis for calculating the number of shares for employee compensation distributed in stock, and the accounting treatment if the actual amount of allotment differs from the estimated amount: Compensation to employees and directors is estimated on the basis of the pre-tax net

income for the year ended, taking into account the legal reserve and other factors, and is recognized as operating expenses for the year. In addition, the Company has not allotted stock dividends this year.

3.Information on allotment of employees' remuneration and directors' remuneration approved by the Board of Directors.

2020 ; Unit: NT$1,000;

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(1) Disclosure of information Amount
Proposed Employee Compensation - Stock 0
Proposed Employee Compensation - Cash 18,000
Proposed allotment of directors' emoluments 15,000
The amount of the proposed employee stock bonus and None
its proportion to the aggregate amount of individual or
individual financial report net income after tax and total
employee compensation for the period.
(2) Earnings per share related information (Unit: NT$)
Original earnings per share 2.21
Estimated earnings per share 2.21
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3-1 If there is any difference between the estimated amount of the expense and the amount recognized in the year of recognition, the amount of the difference, the reasons for the difference, and the circumstances under which the difference was handled should be disclosed.

The Company has no such circumstances

1. The actual allotment of employees’, directors’ and supervisors’ remuneration in the previous year (including the number of shares allotted, the amount and the price of shares), the difference between the allotment and the recognition of employees’ bonuses and directors’ and supervisors’ remuneration, and the amount of the difference, the reasons for the difference and the circumstances under which the difference was handled, should be stated: The actual amount of directors’ and supervisors’ remuneration of NT$6,000 thousand and employees’ remuneration of NT$9,000 thousand for 2019 is no different from the amount proposed by the board of directors on March 20, 2020.

(10) Buyback of Treasury Stock: None.

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• (II) Corporate Bond: None.

• (III) Preferred Shares: None.

• (IV) Issuance of Overseas Depositary Receipts: None.

• (V) Employ Stock Warrants: None.

• (VI) New Restricted Employee Shares: None.

(VII) Issuance of New Shares for Acquisition or Exchange of Other Companies’ Shares: None.

(VIIII) Implementation of capital utilization plan: None.

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V. Operations Profile

(I) Business Content

• (1) Scope of Business

1. Main business scope

• A. General import and export trade business (except licensing business)

B. Import and export of various electronic parts and components (except controlled products)

• C. Domestic and foreign agent manufacturers of the product distribution tender quotation business (except futures)

D. CC01050 Data Storage Media Manufacturing and Duplicating

E. CC01070 Telecommunication Equipment and Apparatus Manufacturing

F. CC01080 Electronic Parts and Components Manufacturing

G. F401021 Restrained Telecom Radio Frequency Equipments and Materials Import

H. F113070 Telecommunications equipment wholesale industry

I. F213060 Retail Sale of Telecommunication Apparatus

J. I301010 Software Design Services

K. F113030 Wholesale of Precision Instruments

L. F116010 Wholesale of Photographic Equipment

M. F401010 International Trade

N. F213040 Retail Sale of Precision Instruments

O. F216010 Retail Sale of Camera Equipment

P. E205010 Instrument and Meters Installation Engineering Q. CB01020 Office Machines Manufacturing R. CB01010 Machinery Manufacturing S. CC01030 Electrical Appliances Manufacturing T. CC01040 Lighting Equipment Manufacturing U. CC01060 Wired Communication Equipment and Apparatus Manufacturing V. CC01090 Manufacture of Batteries and Accumulators W. CE01010 Precision Instruments Manufacturing X. CE01030 Optical Instruments Manufacturing Y. CC01990 Other Electrical Engineering and Electronic Machinery Equipment Manufacturing (electrical switches optoelectronic converters, optical fiber electro-coupling connector) Z. CG01010 Jewelry and Precious Metals Products Manufacturing AA. E701010 Telecommunications Construction AB. E701030 Controlled Telecommunications Radio-Frequency Devices Installation Engineering AC. F113020 Wholesale of Electrical Appliances AD. F113050 Wholesale of Office Machinery and Equipment AE. F118010 Wholesale of Computer Software AF. F119010 Wholesale of Electronic Materials AG. F213010 Retail Sale of Household Appliance AH. F213110 Retail Sale of Batteries AI. F214010 Retail Sale of Motor Vehicles AJ. F208050 Retail Sale of Over-the-counter drugs class B AK. C199990 Other Food Manufacturing Not Elsewhere Classified (Ganoderma lucidum powder, Ganoderma lucidum tablets, Ganoderma lucidum capsules) AL. F203010 Retail Sale of Food, Grocery and Beverage AM. F102160 Wholesale of Assist Food Products AN. ZZ99999 All business items that are not prohibited or restricted by law, except those that are subject to special approval.

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2. Percentage of Operation

Unit: NT$ 1,000.00

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

Year 2020
Type of Products Percentage of
Amount
Operation
Digital Integrated Circuits 2,986,180 8.68%
Linear integrated circuits 6,419,802 18.66%
Logic and specific applications
3,472,390 10.10%
Integrated Circuits
Diodes 1,278,804 3.72%
Power field effect transistors 3,454,197 10.04%
Transistors 392,448 1.14%
Passive components 557,833 1.62%
Memory Card 11,904,476 34.60%
Modules and others (Note 1) 3,935,039 11.44%
Total 34,401,169 100.00%
----- End of picture text -----

Note 1: Including labor income.

1. Main distributorship of semiconductor brands:

2. A. WESTERN DIGITAL CORPORATION

3. B. ROHM CO., LTD.

4. C. INFINEON

5. D. VISHAY INTERTECHNOLOGY ASIA PTE LTD

6. E. CYPRESS SEMICONDUCTOR CORP

7. F. Fuji Electric Co., Ltd.

8. G. TAIYO YUDEN

9. H. Diodes incorporated Taiwan Co., Ltd.

10. I. MICROCHIP CORP.

11. J. PARADE TECHNOLOGIES LTD

12. K. Global Mixed-mode Technology

13. L. POWER FOREST TECHNOLOGY CORP

14. M. ELAN MICROELECTRONICS CORP

15. N. INVENSENSE INC

16. O. NICHICON CORPORATION

17. P. SENSORTEK

18. Q. BIWIN

19. Main distributorship of semiconductor products:

20. A. STORAGE PRODUCT (MEMORY CARD, SSD, eMMC)

21. B. IC (LINEAR, LOGIC, DIGITAL, ASSP)

22. C. TRANSISTOR

23. D. POWER MOSFET

24. E. DIODE (Small Signal, SCHOTTKEY, Fast Rectifier Diode)

25. F. LED

26. G. POWER MODULE, GSM/MODEM

H. RESISTOR

I. CAPACITOR (Laminated Capacitor, Tantalum Capacitor, Functional Polymer Capacitor)

J. CAMERA MODULE

K. MCU SOLUTION

L. G SENSOR/GYRO SENSOR

M. T-CON

N. IoT module

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1. Act as agent and distribute new products planned to be developed

We continue to cultivate the PC and peripheral, power supply, and consumer product markets, and maintain the IT industry's momentum by continuously introducing new products to meet the ever-evolving needs of applications.

In response to the new normal life caused by the epidemic, causing the reduction in the movement of people and contact needs, this will further catalyze the technology development of Internet of Things, which is used in production, medical monitoring and service reception of related Internet of Things devices as the main growth momentum. Depending on the user and the environment, relevant IoT devices integrate the required AI computing, image recognition, high-speed transmission and other hardware. The related functions will require higher processing performance of related semiconductors, network integration, and power consumption. Therefore, from the upstream chip to the downstream end product, cloud big data, 5G transmission, data center and artificial intelligence will be the focus of future development. We are also focusing on the application of our key points and expanding our agency product line so that we can provide better service.

(2) Industry Overview

1. Industry Status and Development

The current vertical division of labor in the global information industry has highlighted the increasing importance of electronic component distributors. For upstream suppliers, distributors can replace a dense and complete marketing channel network; for downstream manufacturers, the distributors have complete logistics and inventory management, and can achieve order confirmation, goods preparation and delivery services in the shortest time. In addition, distributors can provide customers with information about new products and new industry development areas to assist customers in designing and planning new products as well as transmitting downstream market information to the original manufacturers. Thus, the electronic components distributor has become an indispensable part of the global information electronics industry system.

With the booming electronics industry and the increase in the number of semiconductor manufacturers, Taiwan’s role in Asia has gradually emerged. Domestic semiconductor parts distributors are striving to transform themselves into global component handling professionals, with some investing in the .00 component channel market and others cultivating the strength of professional design consultants. They are moving toward the concept of professional division of “service” and "integrated marketing. The industrial characteristics of the semiconductor component distributor are mainly “agency model” and “channel establishment”. Due to the nature of the agent business, the distributors have to sign an agent contract with the original manufacturer to protect its own agency. Generally speaking, an agent contract is usually signed once a year and can be renewed or automatically effective if both parties do not disagree at the end of the contract. Marketing strategy, contract time, sales performance and other factors may cause changes in product distribution rights, so there may be uncertainty and risk of cooperation with the original manufacturer. Hence, the marketing channels and customer relationships held by the distributor are the guarantee of continuous cooperation between the two parties. For large professional semiconductor component distributors, their continuous cooperation with the original manufacturers should be maintained, and can even help them obtain more product lines from the suppliers for distribution.

In terms of “channel establishment”, customer satisfaction has become an important indicator of revenue, especially in the marketing-oriented industry. Hence, the key to success in the parts and components distribution industry is to pick up products for their customers in the shortest possible time. As mastering the channel means mastering the market, all enterprises are striving to increase their sales outlets to form a dense network of marketing channels to provide the best service to their customers. Therefore, the value of a professional semiconductor component distributor is to create the best value for the product by taking into

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consideration the product characteristics, market conditions and appropriate channels.

It is worth noting that the global semiconductor M&A trend has resumed, with global semiconductor acquisitions climbing again to $28 billion in 2019 from $25.9 billion in 2018, driven by M&A deals in networking and wireless ICs, and semiconductor suppliers looking for medium- to long-term high-growth products and automotive applications, or retooling their businesses in response to new trends.

More importantly, semiconductor companies are aggressively pursuing the next generation of technologies, including 5G and self-driving cars, and are therefore actively pursuing mergers and acquisitions. Under this circumstance, it is still necessary to pay attention to the changes in the product agency lines of domestic semiconductor channel companies driven by global small and medium-sized acquisitions. After all, the M&A transactions conducted by the global electronic components industry in recent years often lead to the integration of the respective channel partners of the two merged companies, and this trend will also reduce the overall number of channel partners of electronic components suppliers.

In fact, at the end of 2020, TI terminated the agency with the two leading semiconductor distributors, and in the future, TI will cooperate with the commissioning OEM industry and small and medium-sized logistics industry in order to expand the management of customer relationship. In other words, the chip makers will no longer go through semiconductor distributors, but will instead replace the distributors and interact directly with the small and medium-sized customers which they had less contact with in the past. For the reason explained above, this also more or less reflects the changes in the semiconductor channel market. In addition to the decline in global electronic component margins, suppliers have to strengthen their own sales channels to maintain profitability and keep technology and products in their own hands, meaning that the original physical-store and agent-based approach is developing into online stores and direct stores. Among them, the analog semiconductor field is changing the fastest, and the increasing integration of chips is one of the reasons for the changing channel ecology in the semiconductor market. However, semiconductor distributors still have relative competitive value in the supply chain of the semiconductor market, including the technical capability of FAEs (application engineers), and the close relationship between the channel providers and the original manufacturers and customers, which are more difficult to be replaced by the direct operation of chip vendors.

Looking ahead to the dawn of epidemic prevention in 2021, related technology tools such as remote working, non-contact, AI, and image recognition will take 5G and Internet of Things as the key to development, and then deepen the integration with industrial, medical, and car networking fields to generate business models and industrial forms with new application scenarios. For example, Smart Medical will focus on remote medical care, wearable devices and status tracking, making detection capability and accuracy a key product. On the other hand, the growth momentum of smart life comes from the comfort of automation, home security and sanitation monitoring. As the demand for smart terminals has not faded, coupled with the epidemic, the renewed emphasis on physiological data measurement for health applications, the expected release of new products and the postponement of international competitions by one year, the products will continue to perform well in 2021. In view of the 5G communication, consumer electronics, and the expected recovery of the automotive and cell phone consumption, the demand for IC design, packaging and foundry for upstream key components of semiconductors can be cautiously optimistic. Overall, the business opportunities arising from the post-epidemic era are not only driving the development trend of the industry, but also changing the lifestyle of consumers. After experiencing the challenges rising up in 2020, companies and consumers will be able to respond to the epidemic more positively and proactively in 2021, and to welcome the recovery of the industry after the rain with the new normal.

1. Upstream, midstream and downstream industrial linkages

A. The Company is a professional distributor of semiconductor components, and its upstream, midstream and downstream connections are described as follows:

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In the production and distribution structure of the information electronics industry, semiconductor component distributors play an important role as a bridge between upstream component suppliers and downstream production manufacturers, with the upstream being mainly domestic and foreign manufacturers of various information, communication, and consumer electronics products, and the downstream being manufacturers of information, communication, and consumer electronics products. The midstream channel providers a complete sales network to upstream manufacturers, and provide downstream manufacturers with professional technical skills and extensive knowledge of semiconductor parts and components to provide integration and application consulting services to downstream manufacturers, and channel providers can integrate the needs of downstream manufacturers to purchase from upstream manufacturers to obtain the greatest price advantage, and with systematic warehouse management and diversified distribution In addition, the channel can integrate the needs of downstream manufacturers to purchase from upstream manufacturers to obtain the greatest price advantage, and with systematic warehousing and diversified distribution brands, the products are sold to the downstream industry.

• B. Upstream, midstream and downstream linkage diagram

Major domestic and international semiconductor component manufacturers of information, communication and consumer electronics	à	Semiconductor Components Marketing Channel	à	Information, electronic communication products manufacturing

Semiconductor component distributors play a two-way communication role between OEMs and customers, providing multiple services such as market information collection, business marketing, product promotion, logistics/inventory management, technical support, and financial leverage, as well as careful maintenance of their own operations and profitability in order to sustain in the ever-changing electronics industry.

• 3.Various development trends and competition of products

• A. Product development trends

The Company is a distributor of semiconductors for handheld devices, computers and peripherals (IT/Computing), consumer electronics, telecommunications & communications, industrial electronics, and automotive applications. Industrial Electronics), Automotive (Automotive), etc. Uncertainty and fears generated by the COVID-19 epidemic are growing, but upstream technology providers must continue to focus their long-term investments, maintain interactions with partners and potential customers, and seek stability in specific markets, while emerging technologies such as 5G, data centers, AI and the Internet of Things (IoT), high-performance computing, and smart edges will underpin the economic recovery.

The following are highlights by client application area:

• a. Handheld devices (including cell phones, smart watches and bracelets, etc.)

According to the report of Topology Research Institute, smartphone shipments will decline for two consecutive years in 2020 due to the impact of the new pneumonia epidemic and the depressed terminal consumption. The outlook for 2021 is that smartphones will return to 9% annual growth rate as the epidemic eases, the economy recovers and the base period is low. The 5G cell phone penetration rate will grow from 1% to 19% in 2020 and is expected to reach 38% in 2021, with Huawei and Apple

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accounting for more than 60% of the market in 2020 and Xiaomi, OPPO and Vivo making up for the 5G cell phone market share left by Huawei in 2021.

Due to the stagnant growth of smartphones, brand manufacturers have started to experiment with more types of products, including smart watches/bracelets, TWS Bluetooth phones, AR/VR devices, and other emerging products that can be used as extensions of smartphone functions; among them, smart video can be transferred to AR/VR devices with functions such as body tracking; audio can be extended to TWS Bluetooth headsets with voice Audio can be extended to TWS Bluetooth headset and connected to various functional applications with voice assistant; smart watch/bracelet can handle message notifications from smartphones and serve as a device for physiological data collection.

Therefore, even though the overall wearable device market is impacted by the COVID-19 epidemic in 2020, the overall market will still maintain an upward growth trend as brand manufacturers increase their investment. Smart bracelets are expected to grow by 3% to 82.9 million units in 2020, while smart watches are expected to grow by 30.2% to 78.9 million units. The reason why the growth rate of smart bracelet is lower than that of smart watch is because the base period is higher, the manufacturers are less likely to choose the lower-priced and more limited smart bracelet when they invest in this industry, and most of them will aim to develop the smart watch. Therefore, the existing brands in the market continue to launch low-cost bracelet products, but more focus is placed on the watch products, new entrants will also use the smart watch market as the main entry point, resulting in the smart watch market will continue to have good growth in 2020.

b. Computer and its surrounding IT&Computing (PC including Desktop and traditional Notebook)

Market research agency Canalys recently released its PC market outlook report, pointing out that global PC shipments have been increasing since the second quarter of 2020, with total shipments expected to reach 458 million units in 2020, an annual increase of 17 percent. It is worth mentioning that due to the impact of the epidemic, the demand for desk-top machine replacement from enterprises and education has dropped significantly, making the shipment of desk-top machines decline by 23.1% in 2020. Looking ahead to 2021, Canalys expects global PC shipments to grow 1.4% annually to 464 million units, driven by continued growth in laptops.

Looking back at the global PC market in 2020, Canalys research shows that global demand for laptops and tablets is growing strongly due to remote opportunities, thus boosting overall PC sales. PC shipments (including desktops, laptops and tablets) are expected to reach 143 million units by the fourth quarter of 2020, up 35% year-over-year, while overall PC shipments are expected to reach 458 million units in 2020, up 17% year-over-year.

The number of laptops to be shipped in 2020 is expected to reach 241 million units, up 27.9% from 188 million units last year, while the number of tablets to be shipped will reach 156 million units, up 26.5% from 123 million units last year, due to strong demand for remote work and learning.

However, compared to the dramatic growth of laptops and tablets, the sales of desktop computers this year have become very weak. The overall 2020 shipment is estimated to be around 60 million units, down 23.1% compared to 79 million units last year, mainly due to the impact of the epidemic and a significant drop in demand for desk-top replacements from businesses and education.

Therefore, Canalys predicts that, with the demand for remote work and study

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continuing, PC growth will continue into 2021, and laptop shipments will continue to grow, but at a slower pace, with annual growth shrinking to 3.3%. However, driven by notebooks, global PC shipments are expected to maintain growth in 2021, increasing 1.4% annually to 464 million units.

c. Consumer

Consumer electronics are electronic products that are used by consumers in their daily lives. They are specific household appliances that contain .00 electronic components and are usually used for entertainment, communication, and paperwork purposes, such as audio equipment, TV sets, DVD players, and even electronic clocks. An important characteristic of consumer electronics is the tendency to lower prices over time. Thanks to the efficiency of manufacturers and improvements in technology, consumer electronics products are constantly evolving.

The new epidemic in 2020 has drastically changed the global lifestyle of human beings. The traditional habits of people moving to work, school, consumption, and travel have been forced to change, and under the new normal living conditions brought about by the epidemic, people are gradually experiencing more convenience, energy saving, and higher security from smart home devices because they are isolated from home. The trend of home economy is on the rise, and the characteristics of energy saving, automation, convenience, health promotion and affordable price will be the key to promote the continued growth of the smart home IoT device market.

According to Guidehouse Insights, despite the global economic impact of the outbreak, the smart home device market has remained largely stable as many consumers continue to purchase smart home devices that improve their lives and provide added value. However, he also warned that the side effects of the economic downturn brought by the epidemic will still affect the consumer market to some extent, including mass unemployment, resulting in a stagnation of the overall market growth in the short term.

However, Strategy Analytics estimates that the overall market is expected to recover gradually after 2021, with related consumer spending reaching $62 billion and growing at a CAGR of 15% to $88 billion by 2025. The overall market is supported by smart thermometers, smart surveillance cameras, smart doorbells, smart lights and other devices that are easy to install and can be purchased online and delivered to your home. On the other hand, the demand for more complex smart home devices that require professional installation has declined, as people are still worried about being in contact with outsiders or even sharing the same space during the epidemic. The overall market is not expected to return to normal until 2023 or even later.

According to Bill Ablondi, director of Strategy Analytics' Smart Home strategy consulting services, the survey of consumers and suppliers shows that some smart home devices have increased in demand due to the epidemic, such as security cameras, smart doorbells, and smart thermometers, with the younger age group in particular having the highest purchase intentions.

d. Telecom&Communication

According to the MIC, the global communications industry is expected to grow in 2021, with the four markets of "consumer (e.g., smartphones)," "5G telecom networks," "enterprise networks," and "data centers" driving the growth of the global communications market in 2021, with an estimated 8.1% growth in output value to $613.3 billion, of which mobile devices account for about 70%. Smartphone shipments worldwide will be hit by the epidemic in 2020, but the market is expected to grow by a positive 9% in 2021, with 1.35 billion units shipped. For 5G cell phones, the shipment volume will be 230 million units in 2020, with a penetration rate of 18.4%, of which

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mainland China accounts for more than 60%. The top three brands of 5G cell phones are Huawei (33%), Apple (31%) and Samsung (13%), and the estimated shipment of 5G cell phones will reach 540 million units in 2021, with an annual growth rate of 136%.

There are three key trends in the communications industry in 2021. The first is smartphones. The U.S. continues to tighten controls on Huawei. After Huawei loses its cell phone market, the global landscape is bound to be in a new situation. According to the MIC, the key point will be whether Apple is actively developing low-cost models. If Apple supports the local supply chain in mainland China, it will have a negative impact on the revenue performance of Taiwan’s mobile communications industry. On the other hand, with 5G supporting large bandwidth and the continuous upgrading of product features, software and hardware specifications such as screens, lenses, and artificial intelligence, Taiwan's communications industry can still look forward to the business opportunities brought by the 5G replacement wave in 2021. The second key is the commercialization of 5G in South Korea, which will serve as an important reference for domestic telecom operators. According to the MIC, since the commercialization in April 2019, the ARPU performance of South Korean telecom operators is better than that of the 4G era, and has even stopped falling and turned positive. 5G helps telecom operators' revenue, and the 5G applications provided by telecom operators, such as high-quality audio and video AR/VR and cloud gaming services, have the opportunity to bring higher traffic and service volume than 4G users. In addition, mobile carriers in Europe and the U.S. will accelerate the construction of 5G networks in 2021, with open networks, private networks, marginal computing and other topics to enhance market enthusiasm will be another focus of 5G. The third key is in the area of networking. The observation focuses on fixed network service providers’ continued expansion of FTTH network construction, promotion of 1Gbps+ home end services, and introduction of new generation 10G PON networks. In addition, 5G network drives the 25G fiber optic field to take off, and the future demand for enterprise and data center related networking equipment is expected to have positive performance.

e. Industrial Electronics

Taiwan’s industrial computer production in the first three quarters of 2020 is about $26 billion, a decline of 2.7% compared to 2019, mainly due to the shortage of spare parts and logistics delays caused by the COVID-19 outbreak and the delay in project development due to the continued epidemic. In addition, the overall economic recession has made manufacturers more conservative and cautious, resulting in limited orders for industrial computers. However, from the demand side, in response to the needs of epidemic prevention and medical treatment, the promotion of temperature detection systems, respirators and medical equipment, etc., it is estimated that the overall industrial computer production value in Taiwan is still expected to reach NT$35.4 billion in 2020.

Looking ahead to 2021, although the global economy is still waiting for time to recover, as the order deferral situation eases, countries will increase public infrastructure investment to revitalize the economy and the new lifestyle brought by the new epidemic will drive the digital transformation of individual vertical applications. For example, the manufacturing industry can enhance its "survivability" by introducing smart manufacturing; the retail industry is in need of digital transformation in response to "non-contact" interactions; the logistics industry is increasing the demand for AMR/AGV to reduce manpower dependence; and countries

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are increasing their public infrastructure budgets to revitalize their economies, Taiwan's industrial computer output will have the opportunity to grow and take advantage of the development of Internet of Things and AI technologies to open up new business opportunities.

f. Automotive

According to Topology Research Institute, as the global consumer market demand gradually recovers, it is estimated that the global vehicle shipment will reach 83.5 million units in 2021. In the fourth quarter this year, major automakers and Tier 1 operators began to replenish their inventories, which in turn drove up demand for automotive semiconductors. Global automotive chip production is estimated to reach $18.67 billion in 2020 and $21 billion in 2021, representing an annual growth rate of 12.5%.

In 2020, the automotive chip market was hit by trade friction between the U.S. and China and the epidemic. In addition to the supply side, factories have been shutting down since the beginning of the year due to the epidemic, while the demand side has also been affected by policies related to the prevention of epidemics at home, which has significantly reduced people’s willingness to purchase vehicles. The broken supply chain also makes international car manufacturers postpone the release of new cars to market, which in turn has an obvious impact on the car market.

Even though the automotive market is facing serious challenges, major automotive semiconductor companies are still actively developing and expanding the automotive chip market. The main reason for this is that the validation time for newly developed automotive chips is longer, and each vehicle manufacturer has its own certification specifications to meet. If one can get ahead of the game, there is a chance of entering the supply chain for the new vehicles to be released after 2023. For example, NXP has collaborated with TSMC on 5nm automotive processors; ST and BOSCH have collaborated on automotive microcontrollers; With the completion of the Cypress acquisition, INFINEON’s automotive NOR Flash and microcontrollers (MCU) strengthen INFINEON’s complete portfolio of automotive-related solutions.

Overall, in-vehicle information and communication, ADAS, self-driving cars and electric vehicles are irreversible trends in the automotive industry and are key drivers for the growth of automotive semiconductors. Whether to win in the market in the future will depend on the speed of advanced process introduction and mastery of automotive power semiconductor production. Topology Research Institute also highlighted that the global semiconductor industry is currently limited by the shortage of wafer fab capacity supply, and the shortage problem will not be solved in the near future. A similar situation is expected in the automotive sector, so IDMs with their own fabs will have a greater competitive advantage in the automotive market. B. Competition situation

In the past, the revenue of the products distributed by Taiwan's distributors was concentrated on components for notebook computers, memory, and motherboards, and this concentration was due to the fact that most of the customers in Taiwan's system business were concentrated in this area. With the advent of the post-PC era and IA products, notebook computers and their peripherals have been reduced to single-digit growth, and the key to success for semiconductor distributors lies in their ability to continue to identify the killer applications with market potential and then distribute the necessary key components for them. Such emerging applications include smartphones, LED lighting, industrial control, intelligence, automotive electronics, IOT, networking and other related product groups.

In terms of the structure of semiconductor distributors, large distributors usually have

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strong operational resources and represent a large number of products. If the product price fluctuations come from these high-volume products, the risk is naturally very high. The other category of small and medium-sized channel operators have relatively fewer operating resources, and most of the products they represent are for special applications and more technical support, and the specifications and markets are not fixed, so the competition in the industry is relatively less intense. The risk is also from wrong product development direction.

Semiconductor distributors who demonstrate familiarity with the local market and customer base, as well as the ability to provide technical support, will have the opportunity to secure distributorship with leading semiconductor companies. Our company is one of the most extensive semiconductor component agents in Taiwan. We are currently the agent of linear ICs, diodes, power field effect transistors, transistors, passive ICs, specific ICs, memory ICs, digital ICs and control ICs, memory cards, panels, etc. We have a wide range of products to provide customers with the convenience of purchasing them all at once. We offer a wide range of products to provide customers with the convenience of one-time purchase. Skilled application engineers (FAE) can help customers to shorten product design time and increase market competitiveness; marketing staff keep an eye on industry dynamics and add new brands and products for distribution in a timely manner so that our new product development can be ahead of the industry. As the Company provides value-added services to the market as a whole, it will continue to grow in the competitive market in the future.

At present, most of the agency granted by major international semiconductor companies are compound distributorship contracts, not exclusive contracts, resulting in dozens of companies playing the role of midstream semiconductor distributor in the domestic semiconductor industry.

In recent years, under the promotion of the Market Development Division and business units, the Company has successfully acquired the distribution rights of key components of wireless communication products, optoelectronics products and video multimedia, and continues to cooperate with downstream system manufacturers to develop products, so as to quickly raise the level of technical support and development and achieve the effect of product integration.

(3) Technology and R&D profile:

Research and development expenses and technologies or products successfully developed in the most recent year and as of the date of publication of the annual report: The Company is a semiconductor distributor and not a manufacturer, so it is not applicable.

The company believes that professional semiconductor parts and components marketing and distribution channels for sustainable management, so the company established “Market Development Division”. In addition to market research and new product market development, the company also explores new products and new applications through its existing agent system to keep abreast of market trends and introduce new products from time to time to achieve product integration effects.

In addition to providing the best service, we also provide different solutions to help our customers reduce the time to market. We have developed application design solutions in various fields such as power management (Server power/Industrial and 5G, optoelectronics, peripherals/HMI, communication, video, multimedia devices, MCU, etc.). In addition to continuing its efforts to develop new markets based on its existing product lines and marketing, the Company expects to strengthen its distribution or agency development of products and markets related to IOT, automotive electronics, smart home and other related opportunities in the future.

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Classification byProperties	Product Application Areas	Solution Description
Handheld devices	Wearing device	Integration of wireless communication modules,
Computers and their peripherals	PC (personal computer), NB (laptop), Tablet (Tablet), Server (server)	After the launch of USB4 and the upgrade of PC specifications, PC peripheral related accessories such as Docking/HUB/Cable related solutions. Take and control the ReDriver/ReTimer in Type-C and MUX solution.
Telecom and Communicati on	Telecom for 5G base stations, switches, XPON	5G base station deployment and terminal device modulation and security solutions POE+ENT in Switch Market Solution
Industrial Electronics	Security monitoring, instruments,etc.	Wireless communication solutions, new energy devices,andgrid management systems.
Automotive Electronics	Charging Pile and OBC Car AV, ADAS	Electric vehicle charging pile with OBC, BMS and self-driving system. In-car audio-visual entertainment system solutions.
Consumer Electronics	Home Appliance Board, Smart Home	Home appliance boards in motor drive applications, smart lighting solutions, home appliance/small home appliance motor drive solutions. Home security, smart doorbell, smart lock and other solutions

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• (4) Long- and short-term business development plans

• (1) Short-term development plan

  • A. Strengthen marketing and product planning capabilities.

    • a. Strengthen the market planning ability of the Product Division, fully grasp the market pulse, and analyze the future market trend and scale, respond to the market dynamics to the original suppliers and assist the sales department to promote products.

    • b. To adjust the product mix of the agent's products in line with the product development trend of the agent's product line, and develop its derivative products to expand the added value of the agent's distribution.

    • c. Continuously plan to introduce products that meet new market applications, with special emphasis on the 3C market and emerging applications and industries (such as smart grid, Internet of Things, industrial control applications, automotive electronics, smart home, and energy-saving industries).

  • B. Continuously strengthen the R&D and application engineering process capabilities

    • a. Integrate the company's overall product and technology resources, so as to provide TURNKEY SOLUTION as a whole technology to recommend the products we represent to our customers.

    • b. Actively cultivate software, firmware and hardware talents, cooperate with the Market Development Division to plan the introduction of technology-oriented products, and seek cooperation with IC DESIGN HOUSE to develop products that meet future market trends and incorporate them into the company's marketing scope.

  • C. Strengthen operational and financial management

    • a. Emphasis on internal talent training will be combined with internal resources and external professionals to arrange close courses to improve the overall professionalism of employees; in addition, in order to improve the quality of customer service, we emphasize the implementation of target management to comprehensively improve the operating performance of each business unit.

    • b. To obtain long-term, low-cost capital in the capital market for future operational growth, and to assist the Company in completing its development plans and financial improvement through a sound internal control system and operating procedures.

    • c. Strengthen management to improve the efficiency of the company's manpower and capital utilization, reduce unnecessary processes and waste of human resources, so that the company can maintain good growth and profitability in the competitive market.

• (2) Long-term development plan

• A. Focus on seven major product applications

In the face of increasingly fierce competition in the electronics industry, Zenitron strives to become a "value-added application design solution provider" by strengthening its own R&D capabilities, moving beyond traditional component trading to provide customers with total solutions that accelerate their time-to-market and create irreplaceable value for Zenitron. To match the solution-oriented sales model, the company not only integrates the existing marketing business team, but also devotes itself to training FAE and R&D design personnel. We have been working on application design solutions for seven major areas, including "handheld devices", "computers and peripherals", "power management", "consumer electronics", "communication and networking", "industrial power", and "automotive electronics". In addition to focusing on the integration of existing agency lines, we have also established a market development office to actively seek new agency lines to strengthen the competitiveness of each solution.

• B. Strengthen FAE technical support and design development capabilities to focus on solution sales strategy

Becoming a "technology-leading value-added channel provider" is the company's business strategy. Therefore, mastering new technologies and cultivating professional R&D talents to develop high quality application design solutions are important goals for the company's human resources development. The provision of solutions not only reduces the R&D cost and time for customers, but also cultivates customer loyalty and widens the gap

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with competitors. On the other hand, the cultivation of our own technology will help the company to obtain new product distribution rights and strengthen the competitiveness of our product lines.

• C. Invest in related electronic access-related businesses to expand the depth of service in the parts and components industry

In addition, the company is also constantly seeking new market opportunities to increase its competitiveness. In the long term, the Company will continue to focus on the semiconductor component channel as its core business. In the future, the Company will focus on its own business and extend its investment in electronic channel-related businesses by investing in upstream IC design houses or strategic alliances with the industry. By investing in upstream IC design houses or strategic alliances with peers, we will be able to grasp the pulse of the technology and semiconductor industries, increase product distribution opportunities, create revenue growth and profit streams, and expand the depth of services provided by the component channel industry to upstream, midstream and downstream related companies.

(II) Market and Production and Sales Overview

(I) Market Analysis

1. Major products (services) sold (provided) in the region

Unit: NT$ 1,000.00

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Year 2020
Sales Area Sales amount %
China 30,326,197 88.15
Taiwan 3,301,677 9.60
Other 773,295 2.25
Total 34,401,169 100
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2. Market share

The Company’s 2020 revenue was NT$34,401,169,000, which is approx. 2% market share of revenue of major publicly traded semiconductor component specialty marketers. We are not only a key distributor/distributor for WD, ROHM, FUJI, CYPRESS, IFX, MICROCHIP, etc. in Asia Pacific region, but also continue to plan and introduce new products to meet new markets and applications. The professional technology and services provided to downstream electronic information manufacturers are also highly valued and recognized by the industry.

1. Future market supply and demand and growth

2. (1) Global semiconductor industry is expected to grow by a positive 6.2% in the coming year.

The continued impact of the outbreak in 2020 will have a significant impact on the end-consumer market, with overall demand falling sharply. Benefit from IC inventory replenishment and the COVID-19 epidemic, there is a growth in remote applications, a boost in the demand for 5G infrastructure, high performance computing (HPC), notebooks, etc. The WSTS (Worldwide Semiconductor Trade Statistics Society) estimates that the global semiconductor market (including memory) is expected to grow by 3.3% to $426 billion in 2020, with almost every industry being hit hard by the impact of the epidemic, except for the semiconductor industry still able to maintain the growth. Looking ahead to 2021, HPC, 5G and AI will become the three major growth drivers, and WSTS predicts that the global semiconductor industry will grow at a positive 6.2% annually.

The new normal life in the era of the COVID-19 epidemic will continue to drive remote business opportunities, the demand for home economy and medical care. In addition, 5G communication applications will gradually mature in 2021 and the long-distance business opportunity will continue to last. Online work, learning and shopping will become the norm. With the popularity of Chromebook and other home economy products, the momentum is

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expected to continue until the first quarter of 2021.

In response to the epidemic, causing the reduction in the movement of people and contact needs, this will further catalyze the technology development of Internet of Things, which is used in production, medical monitoring and service reception of related Internet of Things devices as the main growth momentum. Depending on the user and the environment, relevant IoT devices integrate the required AI computing, image recognition, high-speed transmission and other hardware. In addition, Always On and gesture operation will become another key development point. The related functions will require higher processing performance of related semiconductors, network integration, and power consumption.

Multi .00 computing architecture (such as multi-core or CPU+GPU+ASIC) is the current development direction actively tried by the major manufacturers. Through the optimal distribution of multi-.00 computing work, the power constraints are met while achieving the computing needs. As emerging applications continue to develop, ASICs (Application Specific Integrated Circuits) with application-specific computing power and low power consumption are the main focus of multi-.00 computing architectures, attracting the devotion of many companies and start-up teams, bringing the structural changes in the industry.

In 2020, the semiconductor industry is expected to grow significantly, driven by the demand for 5G communication technology and HPC efficient computing, and bring the demand for advanced foundry processes and high-end wafer packaging and testing. IC design, on the other hand, is driving the growth of networking applications and automotive chips under the proliferation of IoT applications.

5G will increase the number of innovative applications worldwide in 2021, as the technical limitations of past 4G technologies in the Internet of Things have led to limited development of large-scale IoT systems (its industrial IoT systems). With the potential of new connectivity capabilities, 5G allows developers and consumers to combine many different devices and sensors into a large system, or even cover an entire city, ultimately making smart cities can be realized, not just a vision. It is used in IoT systems to improve their data processing capabilities, help detect and prevent dangerous situations and manage complex supply chains.

5G will lead the market in a vertical way, and a wide range of vertical applications will become 5G killer applications (smart health, smart transportation, etc.), instead of completely technology-driven market direction, driven by industry demand for application transformation, which can mainly improve WiFi issues, including: (1) information security; (2) performance: interference, capacity (Capacity), etc.; (3) mobility: where 5G open network architecture is conducive to digital integration (IT+CT+OT), AR and VR applications, reducing error rates through virtual-real integration to assist smart manufacturing, highly integrated Video as IoT Sensor, revolutionizing security mechanisms, moving toward smarter manufacturing and improving the accuracy of Autonomous Guided Vehicle (AGV.), AGV (Automated Guided Vehicle) accuracy.

(2) Non 3C application semiconductors market grows year by year

Among 3C applications, the semiconductor market share for consumer electronics and computer applications continues to decline from 52.4% in 2013 to 44.0% in 2021, while the semiconductor market share for communication applications shows a growing trend. The semiconductor market for non-3C applications is growing by year, and the market share of automotive and industrial semiconductors has been growing with the development of smart and automation products in recent years; in 2020, the demand will decline due to the impact of the epidemic, and the demand for computers and consumer electronics will increase, so the share will decline slightly.

(3) Global semiconductor market is dominated by IC chips, with Memory accounting for the highest share

The global semiconductor market is dominated by IC chips, accounted for more than 80% of the total market, with optoelectronic semiconductors in second place.

Memory ICs have benefited from increased demand in recent years, resulting in higher prices, and they are the highest production value category along with Logic Ics. The ratio increased

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significantly in 2018 due to the impact of increased memory capacity of cell phones, demand for mining machines and the launch of 4K TV.

Analog and Logic's share and production value have mostly shown a stable growth trend, except for 2018, which was affected by memory.

The timing of the market recovery will depend on the status of the outbreak control. If the epidemic can be substantially controlled by the introduction of vaccines, the overall semiconductor market is expected to regain growth momentum in the second quarter of 2021. If the U.S. government strengthens the scope of export controls on Huawei, it will have a short-term impact on Taiwan's semiconductor industry, but in the long run, Taiwan manufacturers will be able to regain growth momentum in the market share shift.

The development of the global semiconductor industry in the past few decades has been led by PCs, NBs, wireless communication products and cloud computing, and the industry will continue to evolve in the future. However, in 2020, due to the epidemic, countries and cities are under partial or total lockdown, and the risk of individual unemployment and business closure is rapidly increasing, which in turn causes a steep drop in demand for non-essential consumer electronics. However, the epidemic has also affected work, living habits and consumer behavior, which further affects electronics-related industries and component companies, however, it also generates new demand, such as:

medical equipment for epidemic prevention: respirators, forehead temperature guns, ear temperature guns, blood oxygen machines.

Government expenses: 5G infrastructure (base stations, small base stations, fiber optic networks)

Home economy consumer expenses: mega data centers, servers, solid state drives, game consoles, headset devices, smart watches, true Bluetooth wireless Online office teaching hardware: NB, Chrombook, Surface

1. Competitive Niche

2. (1) Solid management team

The company's main management team has more than years of experience at the managerial level, and the management team has a good business philosophy and cooperation tacit understanding, in addition to a complete training program to enable employees to quickly complete the new knowledge of the industry and work mastery, but also to establish a full staff marketing service consciousness, in order to provide customers with and time and professional services. In addition, through monthly management meetings, the company effectively grasps the industry environment and market trends, and constantly conceives business strategies for semiconductor component distributors in order to create market value for distributors.

• (2) Clear product and market positioning

With years of experience in marketing semiconductor components, we have developed into a professional distributor of semiconductor components. Our original product lines are based on linear ICs, analog ICs and discrete .00 devices, especially in the power conversion/power management and consumer electronics related product markets.

• (3) Professional product service capability

As the global information industry is gradually moving toward international division of labor and integration, professional semiconductor component distributors need to play an active role in industry integration in the promotion of product marketing. Due to the global production model, the value provided by professional semiconductor component distributors to their customers is no longer limited to product and price, but extends to logistic support. We also have a team of Application Engineers (FAE) who not only support the sales staff to introduce products to customers, but also actively assist customers in solving various engineering problems so that the new

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products developed by customers can be launched in the market ahead of others to enhance the overall efficiency and increase the satisfaction of the end market.

• (4) Highly recognized channel value by suppliers

Our company has established a professional market value as a semiconductor component distributor in our professional marketing organization, and has been cooperating with suppliers for more than 30 years in our original product lines. With our professional marketing ability and complete distribution network, we have been able to increase the number of new product lines, and domestic and foreign IC design companies also highly recognize our agency sales ability and are willing to cooperate with us to develop and sell products, showing that we have successfully established the value of a professional semiconductor parts distributor.

• (5) Accurate and efficient inventory management

The company uses computerized import and export system to closely monitor the purchase and inventory of various products, in order to grasp the market trends, the supply and demand status between customers and suppliers, and effectively improve the efficiency of material import and export and streamline inventory management costs to meet the needs of customers and time-to-order (BTO/JIT) purchase of materials.

1. Favorable and unfavorable factors of development prospect and countermeasures

2. (1) Favorable factors

   • A. Agency and completeness of supply of a wide variety of parts and components.

The Company is the distributor of WD, ROHM, FUJI, INFINEON, MICROCHIP, CYPRESS, and other major brands, providing the semiconductor components required by the electronic information industry to meet the convenience of customers' one-time purchase. WD is a global leader in flash memory technology research, development, manufacturing, product design, consumer branding and retail distribution, and INFINEON is the technology leader in power field-effect transistors (MOSFETs) and the world's largest manufacturer of these products. The brands we represent continue to develop new products to create new market needs and maintain a competitive advantage.

B. Continue to plan for non-3C niche markets and develop new products Line.

Negotiate and cultivate new agent lines to develop new products and new markets that meet future market trends. Energy saving industry, industrial control, white goods, automotive electronics (new energy vehicles), smart home, IOT, wearable devices, unmanned aerial vehicles, etc. are the markets to focus and cultivate.

C. Complete marketing organization and industry professionalism oriented market development office/business unit.

The product department is responsible for planning the overall marketing plan for each agent's products and analyzing the future market trend and scale. The Business Unit specializes in its specific industries and regions, providing specialized services and long-term customer relationship development, including PC and peripheral markets, power supplies, consumer electronics, network communications, and other favorable markets. Our head office in Taiwan is located in Taipei, and we have set up business units in Hsinchu, Taichung and Kaohsiung to serve our customers in close proximity. In the highly growing Mainland China market, Zengqi has sales and logistics centers in Hong Kong, Southern China, Eastern China, Northern China, and Southwest China.

D. Professional technical support team to provide customers with immediate solutions: The

The company quickly grasps the latest technology market trends, communicates the latest product solutions to customers and provides immediate services, and holds seminars with suppliers on related industries and product information to discuss with

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customers to grasp the latest information. The Company provides total solution for our products and responds to customers' technical questions about components quickly, save R&D cost and shorten time to market for new products.

• (2) Adverse factors and countermeasures:

• A. General electronic products continue to low price fermentation profit space is constantly compressed

  • Countermeasures:

  • a. Enhance employee education and training, stimulate self-learning awareness among employees, and implement overall marketing management to improve the company's production and competitiveness.

  • b. To instruct the product manager to reflect the overall market competition to the suppliers in a timely and strict manner, and to actively seek the suppliers' price support in order to expand the business performance and increase the profit.

  • c. Develop high margin markets, such as industrial computers, servers, etc.

  • d. Set up R&D application engineering team to assist customers to use our products to complete the design more quickly to grasp the market opportunities and ensure higher profits and market, and timely introduction of new agent products to grasp the market out of the old and replace the new business opportunities.

• B. Deteriorating competition and increased risk of bad debts

• Countermeasures:

  • a. Strengthen the management of credit and account recovery, and instruct the Customer Service Department, the Business Department and the Finance Department to gain an in-depth understanding of customers' operating conditions and implement customer credit and credit evaluation. The finance department collates the accounts receivable collection situation on a monthly basis and forwards it to the head of the business department to urge the business colleagues to collect the accounts receivable on time.

• C. Short product life cycle

Countermeasures:

     - a. Weekly meeting of each sales department to review the status of parts and components used by customers for production and development of models and import/sales.

     - b. Standardize sales forecast, ordering (stocking) / purchasing process, use computerized information management system to clearly obtain inventory aging analysis, and instruct product managers to set up handling methods and preventive measures to be taken.

  - D. Industry consolidation, the larger the better Countermeasures:

     - a. Strengthen staff education and training, fully familiar with the products and related application technology of each distribution brand, fully exploit the value of professional semiconductor distribution channels, and provide customers with the convenience of one-time purchase.

     - b. Strengthen the cultivation of niche markets, provide a more flexible and long-term cooperative approach to customer management, and strengthen the company's overall team service standards to gain customer recognition and consolidate and develop better customer-supplier relationships.

• (2) Significant uses of major products and production processes

• Important applications of the main products

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

Main Product Categories Product Name and Usage
Operational amplifiers, comparators, voltage stabilized
ICs, bandwidth regulation, digital/analog converters,
Linear integrated circuit (LINEAR) audio ICs, image processing, sound processing, video
processing, DC motor drivers, integrated circuits for
telephones and communications, etc.
Logic and application-specific Logic processing, microcontroller (MCU), USB chip
----- End of picture text -----

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

Main Product Categories Product Name and Usage
integrated circuits digital signal processor (DSP), optical disk drive products,
computer motherboards, satellite positioning systems,
LCD monitors/TVs, digital cameras, and other uses.
Embedded Flash/Memory Card, NAND flash memory ICs/memory cards and solid state
Solid State Drive (NAND FLASH drives for tablet PCs, notebooks, digital cameras, cell
MEMORY IC/CARD & SSD), phones, GPS, Gaming, etc.
SRAM
Distributed semiconductor It is used for signal amplification, signal switching, signal
component (including transistors, control, signal display and voltage stabilization,
power field effect transistors, rectification, and circuit driving of electronic circuits.
diodes, light emitting diodes, etc.)
Wafer and array resistors, tantalum capacitors, laminated
Passive components capacitors, functional polymer capacitors, voltage control
oscillators for mobile phones, SAW FILTER, etc.
Modules and others Power modules, camera modules for cell phones,
SENSOR, FLASH Memory, etc.
----- End of picture text -----

1. Production process: The Company is a semiconductor distributor and not a manufacturer, so it is not applicable.

2. (3) Supply of major raw materials: The Company is a semiconductor distributor, not a manufacturer, so it is not applicable.

3. (4) The names of customers who have accounted for more than 10% of the total purchase (sales) and the amount and proportion of purchase (sales) in any of the last two years

4. Name of suppliers who have accounted for more than 10% of total imports in any year of the last two years

Unit: NT$ 1,000.00

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2019 (Note1) 2020 (Note1) As of Q1, 2021 (Note 1)
Relati Relati
Relation
Percent on Percent on with
Item Name Amount with Name Amount with Name Amount Percent(%)
(%) (%) Issuer
Issuer Issuer
Supplier A
1 3,574,020 14.97 None [Supplier A ] 8,103,091 23.17 None [Supplier D ] 1,561,546 17.17 None
(Note 2) (Note 2) (Note 2)
Supplier
2 2,855,072 11.95 None Supplier B 3,747,641 10.72 None Supplier C 1,244,119 13.68 None
B
3 Supplier C 3,639,078 10.40 None Supplier B 1,204,975 13.25 None
4 Others 17,453,143 73.08 None Others 19,483,014 55.71 None Others 5,082,804 55.90 None
Net Total Net Total Net Total
23,882,235 100.00 - 34,972,824 100.00 - 9,093,444 100.00 -
Supplies Supplies Supplies
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Note1: From 2019 to the first quarter of 2021, the Company adopted IFRSs and presented the consolidated financial information.

Note 2: Supplier D is the parent company of Supplier A; with businss consideration, Supplier A's products were supplied by Supplier D by orders starting from November of 2020

The main suppliers of our products are memory cards, power field transistors, integrated circuits, and diodes, etc. Our main suppliers include Rohm, WD, INFINEON, MICROCHIP, and Fuji International, etc. Since we have maintained long term relationships with our former suppliers, we have been among the top ten suppliers over the years because of our stable distribution rights.

1. Information on customers who have accounted for more than 10% of total sales in any of the last two years

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Unit: NT$ 1,000.00

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2019 - Consolidated (Note 1) 2020 - Consolidated (Note 1) As of Q1, 2021 (Note 1)
Relation
Relation Relation
with
Item Name Amount Percent with Name Amount Percent with Name Amount Percent
Issuer
Issuer Issuer
1 Customer A 2,969,687 11.00 None [Customer ] 6,350,843 18.46 None [Customer ] 1,935,440 18.49 None
A A
2 Other 24,023,182 89.00 None Other 28,050,326 81.54 None Other 8,532,633 81.51 None
Net sales 26,992,869 100.00 Net sales 34,401,169 100.00 Net sales 10,468,073 100.00
----- End of picture text -----

Note 1: From 2019 to the first quarter of 2021, the Company adopted International Financial Reporting Standards (IFRSs) and presented the consolidated financial information.

We are mainly engaged in the sales of semiconductor components, and our main customers are well-known domestic electronic product manufacturers, such as Xiaomi for smart phones, ASUS, Gigabyte, and MICRO STAR for motherboard manufacturers; INVENTEC, TECH-FRONT, TECH-COM, and Compal for notebook computer manufacturers; OPTOTECH, Delta, and Hon Hai for power supply and communication peripherals; and VIEWQUEST and PREMIER for digital camera manufacturers. In addition, the Company established Zengqiang (Hong Kong) subsidiary in 1998 in order to strengthen the demand for parts and components for manufacturers relocated to Hong Kong and Mainland China, and the business scale of the Hong Kong subsidiary grew rapidly due to the accelerated westward expansion of domestic manufacturers. Overall, the amount and proportion of sales to each of the Company's major customers may increase or decrease depending on the industry trend, business conditions or strategic adjustments of the customer.

• (5) Production volume for the last two years: omitted (Not applicable to the Company as a semiconductor distributor and non-manufacturer)

• (6) Sales volume for the last two years:

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Year 2019 2020
Sales Volume Domestic Sales Foreign Sales Domestic Sales Foreign Sales
Main Products Quantity Value Quantity Value Quantity Value Quantity Value
Digital Integrated
Circuits 13,180 561,151 190,849 2,107,199 18,999 323,955 272,391 2,662,225
Linear integrated
circuits 158,810 459,019 662,947 4,806,173 191,487 591,382 666,376 5,828,420
Logic and specific
applications
Integrated circuits 9,386 573,238 115,410 2,480,459 8,625 356,427 153,138 3,115,963
Diodes 167,527 145,296 1,703,256 1,273,080 151,704 140,984 1,753,383 1,137,820
Power Field Effect
Transistors 93,262 335,438 948,846 2,881,373 78,486 293,922 1,123,909 3,160,275
Transistors 58,116 50,484 496,721 317,956 68,571 52,880 531,035 339,568
Passive components 2,301 3,683 674,639 579,129 3,485 6,431 652,902 551,402
Memory Card 6,183 1,402,447 26,163 5,851,910 5,852 1,245,884 56,125 10,658,592
Modules and others 20,347 343,754 547,490 2,821,080 43,180 289,812 931,372 3,645,227
Total 529,112 3,874,510 5,366,321 23,118,359 570,389 3,301,677 6,140,631 31,099,492
----- End of picture text -----

(III) The number of workers, average years of service, average age and education distribution of employees in the industry for the last two years and as of the printing date of the annual report:

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

Year As of 2021
2019 2020
March 31
Business
Technology of 526 516 520
Products
Number of
Administration
employees
and 197 199 198
Management
Total 723 715 718
Average age 36.82 36.82 37.8
Average Length of Service 6.04 6.04 6.6
PhD 0 1 1
Master 42 45 46
Education College 596 579 585
Distribution High School 85 87 84
Below high
0 3 3
school
----- End of picture text -----

(IV) Environmental Expenditure Information

1. In accordance with the provisions of the law, those who should apply for a pollution facility installation permit or a pollution discharge permit, or those who should pay pollution prevention and control fees, or those who should establish a special unit for environmental protection, the application, payment or establishment of the situation: The Company is not a manufacturing industry, so it is not applicable.

2. The Company’s investment in major equipment for environmental pollution control and its use and potential benefits: The Company is not a manufacturing industry, so it is not applicable.

3. In the latest fiscal year and as of the day that annual report is printed, the company has improved the environmental pollution, and if there is a pollution dispute, the company should explain the handling process: The company is a professional technology integration marketing distributor, so there is no pollution in our business scope.

4. In the latest fiscal year and as of the day that annual report is printed, all losses caused to the Company due to environmental pollution (included liability and the environmental protection assessment result showed violation of laws and regulations; punishment date, punishment document No., Article No. with violation, clause details with violation and punishment details shall be specified, and current and future potential amount forecast and countermeasures shall be disclosed; in case of failure of reasonable forecast, facts which failed to be forecasted shall be specified): None

5. The current pollution status and the impact of its improvement on the company’s earnings, competitive position and capital expenditure and its expected significant environmental capital expenditure in the next two years: None.

6. In response to the EU Restriction of Hazardous Substances Directive (RoHS):

7. (1) We are a distributor of semiconductors and electronic components (we do not manufacture any products ourselves) and serve as an agent for the sale of semiconductors and electronic components from international semiconductor companies in Europe, the United States and Japan, as well as domestic IC design companies. Our main sales customers include domestic and foreign manufacturers of electronic information, network communications and consumer electronics products.

8. (2) We do not sell our products directly to Europe, but mainly to domestic and foreign manufacturers of electronic information products.

9. (3) Our main agent suppliers have all completed the development of new products and related production processes in accordance with the EU Environmental Directive (RoHS), and

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according to the customer's new product model development schedule requirements (whether RoHS certification is required), we provide products that comply with environmental certification for system manufacturers to use in production.

• (4) In order to meet the different material production requirements of leaded and unleaded materials, our company has planned the related material and storage operations and has completed all the related operations.

(V) Labor relations

• (1) Employee welfare measures, training, training, retirement system and its implementation status, and the agreement between labor and management and various employee rights and interests protection measures:

• Employee Benefit Measures

• A. In addition to general benefits such as labor insurance, health insurance, group insurance, and pension benefits, our employees are provided with a complete system of education and training, annual bonuses, and employee compensation.

• B. On April 9, 1999, the Company obtained approval from the competent authorities to set up the Employee Welfare Committee under the letter No. 129635 of Labor 4, 1988, which is responsible for handling various employee benefits, including birthday parties, birthday gifts, holiday gifts, employee travel activities, annual employee health check-ups, wedding and funeral subsidies, emergency relief and educational training subsidies.

• Further education and training.

• Our company attaches great importance to the learning and development of our employees, and training is planned in two parts: internal training and external training.

• (1) Internal training

Our internal training is divided into three categories: management courses, newcomer training courses and professional training courses, all of which are taught by internal professional colleagues, or by external professional instructors.

jManagement Course: Training for supervisors to improve their management skills and strategic abilities.

kNewcomer Training

For new employees, we will introduce the Group, the company's management philosophy, the personnel rules and regulations, the company's internal processes and regulations, the operation of common information systems and the introduction of laws and regulations. lProfessional Training

Each department conducts professional training and product training from time to time according to work progress and professional needs.

Based on the total of the three types of courses mentioned above, the participation of the Company’s employees’ internal training in 2020 is as follows:

according to work progress and professional needs. ased on the total of the three types of courses mentioned above, ompany’s employees’ internal trainingin 2020 is as follows:	according to work progress and professional needs. ased on the total of the three types of courses mentioned above, ompany’s employees’ internal trainingin 2020 is as follows:	according to work progress and professional needs. ased on the total of the three types of courses mentioned above, ompany’s employees’ internal trainingin 2020 is as follows:
Total Training Attendance Total Training Hours Total Training Expenses
874people-time	1,311 hours	11,908

(2) External Training

Our employees can apply for external professional training courses according to their work and personal learning needs, or be assigned by their supervisors. Employees’participation in external professional training in 2020 is as follows:

Total Number of Trainees Total Training Hours Total Training Expenses	Total Number of Trainees Total Training Hours Total Training Expenses	Total Number of Trainees Total Training Hours Total Training Expenses
21people	148hours	54,163

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Managers’ participation in corporate governance-related training:

Managers’ participation in corporate governance-related training:	Managers’ participation in corporate governance-related training:	Managers’ participation in corporate governance-related training:
List of Trained Managers Training Courses Training Hours
YehLu-Chang Accounting Supervisor Continuing Education Course 16 hours
Yeh Xiu-Qi Accounting Supervisor Continuing Education Course 12 hours
Zhang Yu-Ling Corporate Governance Policy Analysis - Audit Law Compliance Practices 6 hours
Xiong Zong-Jun	1. Big data and internal control audit three lines of defense 2. Corporate Governance and Auditing Case Studies	12 hours

3. Retirement System

In accordance with the official letter Pei-Shi-Lau-Er-Zhi No. 09832095900 dated April 13, 2009 from the Bureau of Labor Affairs of Taipei City Government, it is approved that the Labor Standards Law shall be applied to the industry to which the Company belongs from March 1, 1998 in accordance with the official letter Tai-Lau-Dong-I-Zhi No. 037287 dated September 1, 1997 from the Labor Affairs Commission of the Executive Yuan.

In order to establish long-term harmonious labor relations, the Company established the Employees’ Retirement Reserve Fund Supervisory Committee in December 1998 and obtained the approval of the Taipei County Labor Bureau for registration in the letter Pei-Fu-Lau-Er-Zhi No. 396072 dated December 16, 1998, and regularly contributes 2% of the total amount paid to the retirement reserve fund:

(1) Seniority prior to March 1, 1998 is recognized, but the pension base is not calculated.

(2) For the first fifteen years of service after March 1, 1998, two basis points will be granted for each year of service; for the sixteenth year of service, one basis point will be granted for each year of service, up to a maximum of forty-five basis points. If it is less than six months, it will be counted as six months; if it is more than six months, it will be counted as one year.

(3) Starting from July 1, 2005, in accordance with the Labor Pension Act, monthly contributions of 6% of employees' salaries are made to the Labor Insurance Bureau's individual labor pension accounts.

4. Agreement between the Labor and the Management

All regulations and measures of the Company regarding labor relations are in accordance with the relevant laws and regulations and are therefore well implemented. Any new or amended measures regarding labor relations are fully agreed and communicated between employers and employees and sent to the labor-management meeting for approval before being finalized.

The Company has implemented the above benefits and retirement system.

• (2) For the most recent year and as of the printing date of the annual report, the losses suffered by the Company as a result of labor disputes, and disclose the estimated amount of current and potential future losses and the measures to be taken, and if the amount cannot be reasonably estimated, the facts that cannot be reasonably estimated.

• (1) Up to now, the Company has not had any significant labor disputes, and the employees and employers are in harmony with each other, and there are no losses arising from labor disputes.

• (2) Current and possible future measures in response.

  • A. To fully comply with labor laws and regulations and to enhance welfare measures.

  • B. Establish open and honest communication and grievance channels between employers and

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employees.

• C. Establish an operation management system with full participation of all employees.

• (3) Current and potential future losses: The Company has always adhered to the management policy of harmony and honesty, and if there are no other external changes, labor relations should become more normal and harmonious, and no losses will occur.

(VI) Important Contracts:

Supply and sales contracts, technical cooperation contracts, construction contracts, long-term loan contracts and other contracts of significance to investors’ interests that are still in effect in the recent year

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

Nature of Contract Agent Firm Date of commencement of agency contract Main content Restrictions
ROHM SEMICONDUCTOR 2017.04.01-2018.03.31 Annual automatic Sales agent for None
TAIWAN CO., LTD. renewal semiconductor parts
Infineon Technologies Asia Sales agent for None
Pacific Pte Ltd 2015.08.01 - Agreement terminated semiconductor parts
Microchip Technology Ireland 2018.11.8 to termination Sales agent for None
Limited semiconductor parts
None
Realtek Semiconductor 2016.01.01 - Agreement terminated Sales agent for
semiconductor parts
Agent FUJI ELECTRIC TAIWAN 2020.4.1~2022.3.31 Sales agent for None
Contract
CO., LTD. Automatic renewal for one year semiconductor parts
Sales agent for None
Diodes Taiwan, Inc. 2014.12.15 -Agreement terminated
semiconductor parts
Vishay Intertechnology Asia Sales agent for None
PTE LTD 2008.04.01 -Agreement terminated semiconductor parts
CYPRESS 2008.11.24-2010.11.23 Sales agent for None
SEMICONDUCTOR Automatic annual renewal semiconductor parts
Corporation
Western Digital Technologies, 2018.7.12~2021.7.11 Extended for a year Sales agent for None
Inc. after termination semiconductor parts
----- End of picture text -----

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VI. Financial Information

(I) Condensed Balance Sheet and Income Statement in the Past Five Years

(1) Condensed Balance Sheet and Statement of Comprehensive Income - Adopt International Financial Reporting Standards:

1. Individual Balance Sheet - Based on IFRS: (consolidated)

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

Unit: NT$1,000
Financial
Financial analysis for the past five years (Note1~Note 2)
information as
Year 2016 2017 2018 2019 2020 of Mar. 31, 2021
(Note 3)
Item
Current assets 11,791,586 14,163,339 15,973,739 13,493,379 18,490,142 16,495,692
Property, Plant and
494,887 474,478 460,307 449,200 440,004 434,299
Equipment
Intangible assets - - - - - -
Other assets 395,986 370,166 280,147 284,521 360,031 1,191,343
Total assets 12,682,459 15,007,983 16,714,193 14,227,100 19,290,177 18,121,334
Before
7,740,230 10,025,588 12,166,280 9,633,359 14,243,165 12,886,322
Current distribution
liabilities After 14,649,465 13,292,622
8,003,662 10,414,749 12,529,780 9,847,259
distribution (Note 4) (Note 4)
Non-current liabilities 195,306 164,881 181,561 188,033 245,454 237,170
Before
7,935,536 10,190,469 12,347,841 9,821,392 14,488,619 13,123,492
Total distribution
liabilities After 14,894,919 13,529,792
8,198,968 10,579,630 12,711,341 10,035,292
distribution (Note 4) (Note 4)
Equity attributable to
shareholders of the parent 4,746,923 4,781,766 4,366,352 4,405,708 4,801,558 4,591,542
company
Capital stock 2,138,249 2,138,249 2,138,249 2,138,249 2,138,249 2,138,249
Capital surplus 1,020,594 963,289 965,034 965,034 958,734 958,734
Before
1,060,871 1,222,566 1,218,257 1,085,221 1,361,862 1,560,656
Retained distribution
earnings After 955,562 1,154,356
797,439 833,405 854,757 877,621
distribution (Note 4) (Note 4)
Other interests 527,209 457,662 44,812 217,204 342,713 340,203
Treasury stock - - - - - -
Non-controlling interests - 35,748 - - - -
Total Before
4,746,923 4,817,514 4,366,352 4,405,708 4,801,558 4,997,842
shareholders’ distribution
equity After 4,395,258 4,591,542
4,483,491 4,428,353 4,002,852 4,191,808
distribution (Note 4) (Note 4)
----- End of picture text -----

Note 1: The financial statements for the years from 2016 to 2020 were audited and approved by CPAs. Note 2: The Company has no asset revaluation. Note 3: The financial statements for the first quarter of 2021 have been reviewed by CPAs. Note 4: Note 1: The resolution on the distribution of the 2020 earnings has been approved by the board of directors and has not yet been recognized by the shareholders' meeting. The amount of cash dividends and bonus distribution has been approved by the board of directors and has not yet been submitted to the shareholders' meeting.

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• 1. Condensed Statement of Comprehensive Income Based on IFRS (consolidated)

Unit: NT$1,000

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

Financial
Financial analysis for the past five years (Note 1)
Year information as of
Mar. 31, 2021
Item 2016 2017 2018 2019 2020 (Note 2)
Operating revenue 22,266,768 27,575,938 31,079,867 26,992,869 34,401,169 10,468,073
Gross profit 1,331,170 1,477,754 1,813,109 1,483,789 1,621,186 555,900
Operating profit
343,610 490,162 694,040 385,569 426,977 253,969
(loss)
Non-operating
(8,477) 26,572 (154,615) (78,142) 128,079 (8,407)
income and expenses
Net income before
335,133 516,734 539,425 307,427 555,056 245,562
income tax
Continuing business
292,596 432,055 409,036 230,581 472,025 192,557
units
business unit Loss of suspended - - - - - -
Net income (loss) 292,596 432,055 409,036 230,581 472,025 192,557
Other
comprehensive
(259,777) (76,912) (412,163) 172,275 137,725 3,727
income(Income after
tax)
Total comprehensive
32,819 355,143 (3,127) 402,856 609,750 196,284
income
Equity attributable
to shareholders of 292,596 432,492 406,646 230,581 472,025 192,557
the parent company
Net income
attributable to
- - - -
(437) 2,390
non-controlling
interests
Comprehensive
income attributable
32,819 355,580 (6,844) 402,856 609,750 196,284
to shareholders of
the parent company
Comprehensive
income attributable
- - - -
(437) 3,717
to non-controlling
interests
Earnings per share 1.37 2.02 1.90 1.08 2.21 0.90
----- End of picture text -----

Note 1: The financial statements for the years from 2016 to 2020 were audited and approved by CPAs. Note 2: The financial statements for the first quarter of 2021 have been reviewed by CPAs.

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3. Individual Balance Sheet (individual)- Based on IFRS:

Unit: NT$1,000

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Financial analysis for the past five years (Note1~Note 2) Financial
Year information as of
Mar. 31, 2021
Item 2016 2017 2018 2019 2020
(Note 3)
Current assets 7,980,279 10,097,919 10,628,977 8,101,683 11,638,694
Property, Plant and
416,440 398,127 386,569 382,711 376,212
Equipment
Intangible assets - - - - -
Other assets 2,014,293 2,210,413 2,448,605 2,526,420 2,719,063
Total assets 10,411,012 12,706,459 13,464,151 11,010,814 14,733,969
Before
5,470,959 7,761,805 8,918,289 6,424,930 9,747,597
Current distribution
liabilities After 10,153,897
5,734,391 8,150,966 9,281,789 6,638,830
distribution (Note 4)
Non-current liabilities 193,130 162,888 179,510 180,176 184,814
Before
5,664,089 7,924,693 9,097,799 6,605,106 9,932,411
Total distribution
liabilities After 10,338,711
5,927,521 8,313,854 9,461,299 6,819,006
distribution (Note 4)
Equity attributable to Not applicable
shareholders of the 4,746,923 4,781,766 4,366,352 4,405,708 4,801,558
parent company
Capital stock 2,138,249 2,138,249 2,138,249 2,138,249 2,138,249
Capital surplus 1,020,594 963,289 965,034 965,034 958,734
Before
1,060,871 1,222,566 1,218,257 1,085,221 1,361,862
Retained distribution
earnings After 955,562
797,439 833,405 854,757 877,621
distribution (Note 4)
Other interests 527,209 457,662 44,812 217,204 342,713
Treasury stock - - - - -
Non-controlling interests - - - - -
Before
Total 4,746,923 4,781,766 4,366,352 4,405,708 4,801,558
distribution
shareholders’
After 4,395,258
equity 4,483,491 4,392,605 4,002,852 4,198,108
distribution (Note 4)
----- End of picture text -----

Note 1: The financial statements for the years from 2016 to 2020 were audited and approved by CPAs. Note 2: The Company has no asset revaluation. Note 3: In accordance with Article 7 of the Guidelines Governing the Preparation of Financial Reports by Securities Issuers (IFRS version), the Company is not required to prepare a separate financial report for the first quarter of fiscal year 2021. Note 4: Note 1: The resolution on the distribution of the 2020 earnings has been approved by the board of directors and has not yet been recognized by the shareholders' meeting. The amount of cash dividends and bonus distribution has been approved by the board of directors and has not yet been submitted to the shareholders' meeting.

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4. Individual Balance Sheet (individual)- Based on IFRS:

Unit: NT$1,000

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

Financial
Year Financial analysis for the past five years (Note 1)
information as of
Mar. 31, 2021
Item 2016 2017 2018 2019 2020
(Note 2)
Operating revenue 13,401,666 17,601,080 19,875,551 15,469,871 20,128,205
Gross profit 669,935 614,872 794,545 692,791 648,480
Operating profit
123,358 77,060 272,576 179,599 22,321
(loss)
Non-operating
186,715 367,371 200,543 99,340 455,433
income and expenses
Net income before
310,073 444,431 473,119 278,939 477,754
income tax
Continuing business
310,073 444,431 473,119 278,939 477,754
units
business unit Loss of suspended - - - - -
Net income (loss) 292,596 432,492 406,646 230,581 472,025
Other
comprehensive
(259,777) (76,912) (413,490) 172,275 137,725
income(Income after
tax)
Total comprehensive Not applicable
32,819 355,580 (6,844) 402,856 609,750
income
Equity attributable
to shareholders of - - - - -
the parent company
Net income
attributable to
non-controlling - - - - -
interests
Comprehensive
income attributable
to shareholders of - - - - -
the parent company
Comprehensive
income attributable
to non-controlling - - - - -
interests
Earnings per share 1.37 2.02 1.90 1.08 2.21
----- End of picture text -----

Note 1: The financial statements for the years from 2016 to 2020 were audited and approved by CPAs.

Note 2: In accordance with Article 7 of the Guidelines Governing the Preparation of Financial Reports by Securities Issuers (IFRS version), the Company is not required to prepare a separate individual financial statements for the first quarter of fiscal year 2021.

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(2) Name of the accountants and their audit opinion for the last five years

Year	Accounting firm	CPAs	Audit opinion
2020	PricewaterhouseCoopers Taiwan	CHEN,CHIN-CHANG ,LIN,YI-FAN	Unqualified opinion
2019	PricewaterhouseCoopers Taiwan	CHEN,CHIN-CHANG ,LIN,YI-FAN	Unqualified opinion
2018	PricewaterhouseCoopers Taiwan	CHEN,CHIN-CHANG ,LIN,YI-FAN	Unqualified opinion
2017	PricewaterhouseCoopers Taiwan	LIN,YI-FAN, WANG,HUI-HSIEN	Unqualified opinion
2016	PricewaterhouseCoopers Taiwan	TU,PEI-LING, WANG,HUI-HSIEN	Unqualified opinion

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II. Financial analysis for the past five years:

(I) Financial analysis (consolidated)-Adopt International Financial Reporting Standards:

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Year Financial analysis for the past five years (Note 1) Financial
Analysis Items information as
2016 2017 2018 2019 2020 of Mar. 31, 2021
(Note 2)
Fina Debt to asset ratio 62.57 67.90 73.87 69.03 75.10 74.66
ncia Long term capital to property,
l plant and equipment ratio
stru
998.65 1,050.07 988.01 1,022.64 1,147.03 1,111.84
ctur
e
(%)
Solv Current ratio 152.34 141.27 131.29 139.77 129.81 124.09
ency Quick ratio 97.43 84.16 82.48 95.13 84.44 81.30
(%) Interest coverage ratio 607.66 543.07 362.20 259.10 554.36 909.42
Receivables turnover
3.95 4.64 4.24 3.48 4.11 4.41
(times)(Note 4)
Average cash recovery day 92.40 78.66 86.08 104.88 88.80 82.76
Inventory turnover
Oper 4.85 5.17 4.96 4.83 5.79 6.20
(times)(Note 4)
ating
Accounts receivables turnover
capa 7.61 7.50 7.79 7.52 8.63 9.80
(times)
city
Days sales outstanding 75.25 70.59 73.58 75.56 63.03 58.87
Property, plant and equipment
45.07 56.89 66.49 59.35 77.37 95.76
turnover (times)
Total asset turnover (times) 1.73 1.99 1.95 1.74 2.05 2.20
Return on assets (%)(Note 3) 2.70 3.81 3.61 2.48 3.39 4.63
Return on equity (%)(Note 3) 5.95 9.03 8.90 5.25 10.25 16.39
Profi
Pre-tax net profit to paid-in
tabili 15.67 24.16 25.22 14.37 25.95 45.93
capital ratio (%) (Note 3)
ty
Net profit ratio (%) 1.31 1.56 1.31 0.85 1.37 1.83
Earnings per share (NT$) 1.37 2.02 1.90 1.08 2.21 0.90
Cash flow ratio (%) 10.81 (9.60) (15.43) 23.51 (17.13) 2.40
Cash
Cash flow adequacy ratio 53.40 (17.33) (32.41) 23.24 (38.27) (52.26)
flow
Cash reinvestment ratio (%) 10.32 (23.48) (46.75) 39.13 (50.69) 6.34
Leve Operating leverage 1.77 1.57 1.47 1.73 1.78 1.27
rage Financial leverage 1.24 1.31 1.42 2.00 1.40 1.13
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Please explain the reasons for the changes in each financial ratio for the last two years. (Analysis is waived if the change is less than 20%)

The following table shows the changes in financial ratios of the Company of 20% or more for the last two years

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Year Changes Explanation
Analysis item 2019 2020 ratio
Interest coverage ratio 259.10 554.36 113.96% 1
Property, plant and equipment
59.35 77.37 30.36% 1
turnover (times)
Return on assets (%) 2.48 3.39 36.69% 1
Return on equity (%) 5.25 10.25 95.24% 1
Pre-tax net profit to paid-in capital
14.37 25.95 80.58% 1
ratio (%)
Net profit ratio (%) 0.85 1.37 61.18% 1
Earnings per share (NT$) 1.08 2.21 104.63% 1
Cash flow ratio (%) 23.51 (17.13) (172.86)% 2
Cash flow adequacy ratio 23.24 (38.27) (264.67)% 2
Cash reinvestment ratio (%) 39.13 (50.69) (229.54)% 2
Financial leverage 2.00 1.40 (30.00)% 1
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• 1.The increase in operating income and net income before (after) tax was mainly due to the increase in net sales as a result of the growth in 2020.

• Increased receivable, also earlier preparation and response to customer needs leading to increase of inventory as a result of the growth in 2020.

Note 1: The financial statements for the years from 2016 to 2020 were audited and approved by CPAs.

Note 2: The financial statements for the first quarter of 2021 have been reviewed by CPAs. Note 3: Some of the rates for the first quarter of 2021 have been converted on a one-year basis. Note 4: The related ratios of receivables and inventories are calculated on a gross basis.

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(II) Financial analysis (individual)-Adopt International Financial Reporting Standards:

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

Year Financial analysis for the past five years (Note 1) Financial
information
2016 2017 2018 2019 2020 as of Mar. 31,
Analysis Items 2021 (Note 2)
Fina Debt to asset ratio 54.41 62.36 67.57 59.98 67.41
ncia Long term capital to property, plant
l and equipment ratio
stru
1,186.26 1,241.97 1,175.95 1,198.26 1,325.41
ctur
e
(%)
Solv Current ratio 145.87 130.09 119.18 126.09 119.40
ency Quick ratio 99.01 87.10 77.48 87.35 74.57
(%) Interest coverage ratio 771.21 685.08 437.53 354.97 805.73
Receivables turnover (times)(Note
3.21 3.83 3.59 3.09 4.10
3)
Average cash recovery day 113.71 95.30 101.67 118.12 89.02
Oper Inventory turnover (times)(Note 3) 4.91 5.79 5.43 4.66 5.47
ating Accounts receivables turnover Not
7.41 7.39 7.18 6.87 8.99
capa (times) applicable
city Days sales outstanding 74.34 63.03 67.21 78.32 66.72
Property, plant and equipment
32.12 43.21 50.65 40.21 53.04
turnover (times)
Total asset turnover (times) 1.25 1.52 1.51 1.26 1.56
Return on assets (%) 3.10 4.28 3.96 2.59 4.08
Return on equity (%) 5.96 9.07 8.89 5.25 10.25
Profi
Pre-tax net profit to paid-in capital
tabili 14.50 20.78 22.12 13.04 22.34
ratio (%)
ty
Net profit ratio (%) 2.18 2.45 2.04 1.49 2.34
Earnings per share (NT$) 1.37 2.02 1.90 1.08 2.21
Cash flow ratio (%) 13.66 (13.26) (10.57) 30.97 (23.69)
Cash
Cash flow adequacy ratio 64.68 (17.31) (26.71) 50.59 (33.37)
flow
Cash reinvestment ratio (%) 8.65 (25.16) (27.76) 33.74 (48.40)
Leve Operating leverage 2.26 3.35 1.67 1.89 10.14
rage Financial leverage 1.60 70.05 2.05 2.55 (0.49)
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Please explain the reasons for the changes in each financial ratio for the last two years. (Analysis is waived if the change is less than 20%)

The following table shows the changes in financial ratios of the Company of 20% or more for the last two years.

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

Year
Changes
Analysis Items 2019 2020 ratio Explanation
Interest coverage ratio 354.97 805.73 126.99% 1
Receivables turnover (times) 3.09 4.10 32.69% 1
Average cash recovery day 118.12 89.02 (24.64)% 1
Payable turnover ratio (time) 6.87 8.99 30.86% 1
Property, plant and equipment turnover
(times) 40.21 53.04 31.91% 1
Total asset turnover (times) 1.26 1.56 23.81% 1
Return on assets (%) 2.59 4.08 57.53% 1
Return on equity (%) 5.25 10.25 95.24% 1
Pre-tax net profit to paid-in capital ratio
(%) 13.04 22.34 71.32% 1
Net profit ratio (%) 1.49 2.34 57.05% 1
Earnings per share (NT$) 1.08 2.21 104.63% 1
Cash flow ratio (%) 30.97 (23.69) (176.49)% 2
Cash flow adequacy ratio 50.59 (33.37) (165.96)% 2
Cash reinvestment ratio (%) 33.74 (48.40) (243.45)% 2
Operating leverage 1.89 10.14 436.51% 3
Financial leverage 2.55 (0.49) (119.22)% 3
----- End of picture text -----

1. The increase in sales costs and net income before (after) tax was mainly due to the increase in net sales as a result of the growth in

2. Increased receivable, also earlier preparation and response to customer needs leading to increase of inventory as a result of the growth in 2020.

3. The decrease in operating income was mainly due to the fluctuation of the exchange rate of the Taiwan dollar in 2020 and the change in the composition of product sales.

Note 1: The financial statements for the years from 2016 to 2020 were audited and approved by CPAs.

Note 2: In accordance with Article 7 of the Guidelines Governing the Preparation of Financial Reports by Securities Issuers (IFRS version), the Company is not required to prepare a separate individual financial statements for the first quarter of fiscal year 2021.

Note 3: The related ratios of receivables and inventories are calculated on a gross basis.

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Calculation formulas for the financial analysis for the past five years:

1. Financial structure

2. (1) Debt to assets ratio = total liabilities / total assets.

3. (2) Ratio of long term funds to property, plant, and equipment (total equity + non-current liabilities) / net worth of property, plant and equipment.

4. Solvency

5. (1) Current ratio = current assets / current liabilities.

6. (2) Quick ratio = (current assets – inventory – contract property – prepaid items) / current liabilities.

7. (3) Times interest earned ratio=net income before tax and interest expense/interest expense.

8. Operating capacity

9. (1) Account receivable turnover (including accounts receivable and notes receivable resulted from business operation) = net sales / average balance of account receivable (including accounts receivable and notes receivable resulted from business operation).

10. (2) Days sales in account receivable = 365 / account receivable turnover.

11. (3) Inventory turnover = cost of goods sold / average inventory.

12. (4) Account payable turnover (including accounts payable and notes payable resulted from business operation) = operating costs / average balance of account payable (including accounts payable and notes payable resulted from business operation).

13. (5) Average days in sales = 365 / inventory turnover.

14. (6) Property, plant and equipment turnover = net sales / average net worth of property, plant and equipment.

15. (7) Total assets turnover = net sales / average total assets.

16. Profitability

17. (1) Ratio or return on total assets = [net income + interest expense × (1 tax rate)] / average total assets.

18. (2) Return on equity = net income / average net equity.

19. (3) Profit ratio = net income / net sales.

20. (4) Earnings per share = (net income preferred stock dividend) / weighted average stock shares issued (Note 4)

21. Cash flow

22. (1) Cash flow ratio = net cash flow from operating activity / current liabilities

23. (2) Cash flow adequacy ratio = (net cash flow from operating activities within five year / (capital expenditure + inventory increase + cash dividend) within five year

24. (3) Cash reinvestment ratio = (net cash flow from operating activity cash dividend) / (total fixed assets + long term investment + other non-current assets + working capital). (Note 5)

25. Leverage

26. (1) Operation balance = (net operating income operating variable cost and expense) / operating income.

27. (2) Financial balance = operating income / (operating income interest expense).

28. Note 4: The above formula for calculating earnings per share should be measured with special attention to the following items.

29. 1.Based on the weighted-average number of common shares, rather than the number of shares outstanding at the end of the year.

30. 2.The weighted-average number of shares should be calculated by considering the period of liquidity of the shares.

31. 3.For any capital increase from earnings or capital surplus, the percentage of capital increase should be adjusted retroactively in the calculation of earnings per share for prior years and semiannual periods, without regard to the issuance period of such capital increase.

32. 4.If the preferred shares are non-convertible cumulative preferred shares, the dividends for the year, whether paid or unpaid, should be deducted from net income after tax or increased by net loss after tax. If the preferred stock is non-cumulative, the preferred stock dividends should be deducted from net income if there is after-tax profit; if there is a loss, no adjustment is required.

33. Note 5: The above formula for calculating earnings per share should be measured with special attention to the following items.

34. 1.Net cash flow from operating activities represents the net cash inflow from operating activities in the cash flow statement.

35. 2.Capital expenditures represent the annual cash outflows from capital investments.

36. 3.Increases in inventories are included only if the ending balance is greater than the opening balance, and are calculated as zero if inventories decrease at year-end.

37. 4.Cash dividends include cash dividends on common stock and preferred stock.

38. 5.Gross property, plant and equipment represents the total amount of property, plant and equipment before accumulated depreciation.

39. Note 6: The issuer should distinguish each operating cost and operating expense into fixed and variable depending on their nature, and where estimates or subjective judgments are involved, note the reasonableness and maintain consistency.

40. Note 7: If the Company's stock has no par value or the par value per share is not NT$10, the calculation of the ratio of paid-in capital in the preceding paragraph is based on the ratio of equity attributable to the owners of the parent company in the balance sheet.

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(III) Supervisors’ /Audit Committee’s Report for the Most Recent Year

Zenitron Corporation Audit Committee’s Review Report

The Board of Directors has prepared the Company’s 2020 Business Report, parent company only financial statement and consolidated financial statement, as well as the proposal of earnings distribution. The financial statements have been certified by Chen, Jin-Chang and Lin, Yi-Fan, CPAs of PwC Taiwan and reports been verified. The aforementioned business report, together with the financial reports and proposal of earnings distribution have been reviewed and determined to be correct and accurate by the Audit Committee members of Zenitron Corp., in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, we hereby submit this report.

Submitted to:

2021 Annual General Meeting of Zenitron Corporation

Chairman of the Audit Committee:

_________ Hsu, Jui-Mao

March 22, 2021

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(IV) Recent Annual Financial Statement

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of Zenitron Corporation

Opinion

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

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 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 the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audit of the consolidated financial statements as at and for the year ended December 31, 2020 in accordance with the Regulations Governing Auditing and Attestation of Financial Statements ����������������������������������������������������������������������������������������������������and in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants, Financial Supervisory Commission Letter No. 1090360805 of February 25, 2020 and generally accepted auditing standards in the Republic of China for our audit of the consolidated financial statements as at and for the year ended December 31, 2019. 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 Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Group’s 2020 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Group’s 2020 consolidated financial statements are stated as follows:

Valuation of allowance for uncollectible accounts receivable

Description

Refer to Note 4(8)(9), Note 5(1) and Note 6(4) for accounting policies on accounts receivable, accounting estimates and assumptions on impairment assessment as well as details of related impairment, respectively.

The Group assesses impairment of accounts receivable based on historical experience and takes into consideration the customers’ historical default records and current financial conditions to estimate expected loss rate in recognising loss allowance. In addition, the Group provides for full allowance for uncollectible accounts from individual customers where there is an indication that they are individually identified as impaired or a credit impairment actually occurred. As the assessment of allowance for uncollectible accounts is subject to management’s judgment and estimates in determining the future collectability, such as management’s assessment of customer’s credit risk, we considered the valuation of allowance for uncollectible accounts receivable from individual customers a key audit matter. How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

1. Understood and evaluated related policies and internal control of the credit risk management and accounts receivable impairment.

2. Assessed the calculation logic of year-end accounts receivable ageing report provided by management, reviewed the related supporting documents and verified it against the accounting records to ascertain the accuracy of the ageing classification.

3. For those material accounts receivable individually identified by the management to have been impaired, reviewed the supporting documents of impairment assessment provided by the management to assess the reasonableness of collectability.

4. Sampled significant overdue accounts receivable amounts and examined their subsequent collections.

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Assessment of allowance for inventory valuation losses

Description

Refer to Note 4(11), Note 5(2) and Note 6(5) for accounting policies on inventory valuation, accounting estimates and assumptions and details of allowance for valuation losses, respectively.

The Group is mainly engaged in sales of electronic components. The Group measures ending inventories at the lower of cost and net realisable value and provides allowance for inventory valuation losses based on usable condition of inventories that were individually identified as obsolete. As the life cycle of such inventories is short, the market is competitive, and the assessment of allowance for valuation of inventories individually identified as obsolete often involves management’s subjective judgment, we considered the estimation of inventory valuation loss a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

1. Understood and evaluated the internal control procedures over the Group’s inventories individually identified as obsolete.

2. Understood the Group’s warehousing control procedures, reviewed the annual physical inventory count plan as well as participated and observed the annual physical inventory count in order to assess the effectiveness of the procedures the management used to identify and control obsolete inventories.

3. Obtained the details of inventories that were individually identified as obsolete by the management, reviewed the related supporting documents and verified it against the accounting records.

Recognition of distribution warehouses sales revenue

Description

Refer to Note 4(21) for accounting policies on revenue recognition.

The Group has two revenue types, including direct shipment from its own warehouses and shipment from distribution warehouses. For shipment from distribution warehouses, revenue is recognised when goods are picked up by customers. The Group’s responsible unit regularly obtains the inventory movement records generated from the inventory warehousing system of the customer’s distribution warehouses. The supporting documents for revenue recognition include inventory movement records. As the distribution warehouses are located separately in various regions in China, the process of revenue recognition involves numerous manual procedures. Considering the appropriateness of the timing of distribution warehouses’ sales revenue recognition, we considered the recognition of distribution warehouses sales revenue a key audit matter.

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How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

1. Understood the procedures of revenue recognition for shipment from distribution warehouses, evaluated and sampled the internal control of the two parties’ daily reconciliation.

2. Obtained the inventory movement records generated from the inventory warehousing system of the customer’s distribution warehouses in a certain period before and after the balance sheet date and checked whether the timing of revenue recognition was reasonable.

3. Observed the physical inventory count or sent out confirmation letters to the distribution warehouses with significant inventory amount.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of Zenitron Corporation as at and for the years ended December 31, 2020 and 2019.

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 the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, 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, 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’

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

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

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

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

4. 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.

5. 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.

6. Obtain sufficient 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.

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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 year 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.

Chen, Chin-Chang Yi-Fan Lin For and on behalf of PricewaterhouseCoopers, Taiwan March 22, 2021

---

The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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ZENITRON CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

Assets	Notes 6(1) 6(2) 6(3) 6(4) 6(4) 6(5) 6(3) 6(6) 6(7) 6(9) and 8 6(21) 8	December31,2020 December31,2019 AMOUNT % AMOUNT % !"#$#"%%& ' !"!'(")# ( %)"&$ + $") + ()("()# , ##$",&! ) %%"$() ! %,$",,# % '"!,#"## ,$ #"',",)' ,' !"%)& ! !)"#'% ! #"&$$")!% && ,"!(,"#$! %' (,"),# ! !!)"$ ! !(",'"!,% '# !&",'&"&$' ') ')"(', ! !!")' ! ,,*", % ,,'"% & '("&# ! %!")#& + &$"&# + &$")$' + #&"), + ,("(' + #)"%'! + ##"*#! ! ("&) , $&&"$%! ) !'"%'"!$$ ! !,"%%$"! !**	December31,2019	December31,2019
		AMOUNT !"#$#"%%& %)"&$ ()("()# %%"$() '"!,#"## !"%)& #"&$$")!% (,"),# !(",'"!,% ')"(', ,,", '("&# &$"&# #&"), #)"%'! ("&) !'"%'"!$$		%
Current assets Cash and cash equivalents Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - current Notes receivable, net Accounts receivable, net Other receivables Inventories, net Other current assets Total current assets Non-current assets Financial assets at fair value through other comprehensive income - non-current Property, plant and equipment Right-of-use assets Investment property, net Deferred income tax assets Other non-current assets Total non-current assets Total assets				( + ) % ,' ! %' !
				')
				! & + + + !
				)
				!**

(Continued)

~122~

ZENITRON CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

Liabilities and Equity	Notes 6(10) 6(11) 6(7) 6(21) 6(7) 6(12) 6(13) 6(14) 6(15) 9 6(15) and 11	December31,2020 December31,2019 AMOUNT % AMOUNT % !"##!"$%& '( ("($)"&%! & ('"(%# & '"'!$ ' )"()! + &"##' + '"'%&"&%$ )& &"$!("$,, )) '',"))) ) &)'"'' ) ("&)# + &)"(,& + '%")&' + )%"' + ,)"'( $ ('",$& + $'")'&"$#( ,' "#&&"&( #, $$'"'#! $ $$'"'#! $ ("%,& + $")$# + ,$"$& + ,)"&' $ )'("'(' $ $!!"%&& ) $'"'!!"#$ ,( "!)$"&) # )"$&!")' $$ )"$&!")' $( (!",&' ( #("%&' # ,$!")%% ' #("$(' ( #'&"##) & &%"%#, & &')",$& ) )$,")%' ) '"!%$"((! )( '"'%(",%! &$ '"!%$"((! )( '"'%(",%! &$ $")%"$,, $%% $'")),"$%% $%%	December31,2019	December31,2019
		AMOUNT !"##!"$%& ('"(%# )"()! '"'%&"&%$ '',"))) ("&)# '%")&' ,)"'( $'")'&"$#( $$'"'#! ("%,& ,$"$& )'("'(' $'"'!!"#$ )"$&!")' (!",&' ,$!")%% #'&"##) &')",$& '"!%$"((! '"!%$"((! $")%"$,,		%
Current liabilities Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Other payables Current income tax liabilities Current lease liabilities Other current liabilities Total current liabilities Non-current liabilities Deferred income tax liabilities Non-current lease liabilities Other non-current liabilities Total non-current liabilities Total liabilities Equity attributable to owners of parent Share capital Common stock Capital surplus Capital surplus Retained earnings Legal reserve Unappropriated retained earnings Other equity interest Other equity interest Total equity attributable to owners of parent Total equity Significant contingent liabilities and unrecognised contract commitments Significant subsequent events Total liabilities and equity				&* ' + )) ) + + +
				#,
				$ + $
				)
				#*
				$( # ( & )
				&$
				&$
				$%%

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

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ZENITRON CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars, except for earnings per share)

Items

Year ended December 31 2020 2019 Notes AMOUNT % AMOUNT % 6(16) ! "#$#%&$&'( &%% ! )'$(()$'( &%% 6(5) + ")$,,($(" -+ (.-+ ).$.%($%%-+ (.- &$')&$&' . &$#"$,( . 6(20) + .,$"#" - + "- + &)$(,)- + "- + ""'$'' -+ &-+ ).$)#-+ &- + &$&(#$)%( -+ #-+ &$%($))%-+ #- #)'$(,, & ".$.'( & '$#). / ,$..& / 6(17) ,#$"%% / ,#$)&# / 6(18) &'($.&' / ""$")% / 6(19) + &))$&') - / + &("$)),- / &)$%,( / + ,$&#)- / ...$%.' & "%,$#), & 6(21) + "$%"& - / + ,'$#'- / ! #,)$%). & ! )"%$.& & 6(12) + ! .$')" - / +! &#,- / 6(3) )&,$)## & ))#$&## / 6(21) &$&)# / "% / + ,.$%)% - / + .&$,.)- / ! &",$,). & ! &,)$),. / ! '%($,.% ) ! #%)$.' & ! #,)$%). & ! )"%$.& & / / / / ! #,)$%). & ! )"%$.& & ! '%($,.% ) ! #%)$.' & / / / / ! '%($,.% ) ! #%)$.' & 6(22) ! )0)& ! &0% ! )0)% ! &0%*

Operating Revenue Operating Costs Gross Profit Operating Expenses Selling expenses General and administrative expenses Total operating expenses Opertaing Profit Non-operating Income and Expenses Interest income Other income Other gains and losses Finance costs Total non-operating income and expenses Profit before Income Tax Income tax expense Profit for the Year Other Comprehensive Income Components of other comprehensive income (loss) that will not be reclassified to profit or loss Loss on remeasurements of defined benefit plans Unrealised gains from investments in equity instruments measured at fair value through other comprehensive income Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income (loss) that will be reclassified to profit or loss Exchange differences on translation of foreign financial statements Other Comprehensive Income for the Year Total Comprehensive Income Net profit attributable to: Owners of the parent Non-controlling interest Comprehensive income attributable to: Owners of the parent Non-controlling interest Earnings per Share (in dollars) Basic earnings per share Diluted earnings per share

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

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ZENITRON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

Year ended December 31, 2019 Balance at January 1, 2019 Net income for the year Other comprehensive income (loss) Total comprehensive income (loss) Appropriation and distribution of 2018 earnings Legal reserve Cash dividends Balance at December 31, 2019 Year ended December 31, 2020 Balance at January 1, 2020 Net income for the year Other comprehensive income (loss) Total comprehensive income (loss) Appropriation and distribution of 2019 earnings Legal reserve Cash dividends Cash payment from capital surplus Disposal of investments in equity instruments designated at fair value through other comprehensive income Balance at December 31, 2020	Notes				Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent		Totalequity
			Share capital – commonstock		Capitalsurplus		Retained	Earnings		Other Equity Interest
							Legal reserve		Unappropriated retained earnings	Exchange differences on translation of foreign financial statements		Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income
	6(3) 6(15) 6(3) 6(15) 6(15) 6(3)		! "#$%&#"'( / / / / / ! "#$%&#"'( ! "#$%&#"'( / / / / / / / ! "#$%&#"'(	! ()#+%' / / / / / ! ()#+%' ! ()#+%' / / / / / - )#%++. / ! (&#,%'			! )'#'(+ / / / '+#))' / ! )(#$' ! )(#$*' / / / "%#+') / / / ! ,$&#"++	! )%#,), "%+#&$ - $$,. "%+#')' - '+#))'. - %)%#++. ! %(+#+), ! %(+#+), ',"#+" - '#'((. '),#") - "%#+'). - "+,#)++. / $)#,$ ! )'%#))"		- ! %&#($(. / - $#,". - $#,". / / - ! (+#),$. - ! (+#),$. / - ,#+"+. - ,#+"+. / / / / -! $)*#)($.	! &%#,%$ / ""'#$'' ""'#$'' / / ! %+,#&, ! %+,#&, / "$,#"'' "$,#"'' / / / - $)#,$. ! +&#'+'		! '#%))#%" "%+#&$ $,"#", '+"#&) / - %)%#++. ! '#'+#,+& ! '#'+#,+& ',"#+" $%,#," )+(#,+ / - "+,#)++. - )#%++. / ! '#&+$#**&

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

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ZENITRON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Net gain on financial assets at fair value through profit or loss Expected credit loss (gain) Depreciation and amortisation Loss (gain) on disposal of property, plant and equipment Interest expense Interest income Dividend income Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss Notes and accounts receivable Other receivables Inventories Other current assets Changes in operating liabilities Notes and accounts payable Other payables Other current liabilities Other non-current liabilities Cash (outflow) inflow generated from operations Interest received Interest paid Income tax paid Net cash flows (used in) from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at fair value through other comprehensive income Proceeds from capital reduction of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment (Increase) decrease in refundable deposits Increase in other non-current assets Dividends received Net cash flows from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in short-term loans Increase (decrease) in short-term notes and bills payable Payments of lease liabilities Cash dividends paid Net cash flows from (used in) financing activities Effect of exchange rate changes Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Year ended December 31 Notes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

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

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ZENITRON CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY AND ORGANISATION

Zenitron Corporation (the “Company”) was incorporated as a company limited by shares in October 1982. The Company has been listed on the Taiwan Stock Exchange and started trading since August 26, 2002. The Company and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in the sales of electrical components.

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL

STATEMENTS AND PROCEDURES FOR AUTHORISATION

These consolidated financial statements were authorised for issuance by the Board of Directors on March 22, 2021.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by the FSC effective from 2020 are as follows:

follows:
New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Amendments to IAS 1 and IAS 8, ‘Disclosure initiative-definition of material’ Amendments to IFRS 3, ‘Definition of a business’ Amendments to IFRS 9, IAS 39 and IFRS 7, ‘Interest rate benchmark reform’ Amendment to IFRS 16, ‘Covid-19-related rent concessions’ Note: Earlier application from January 1, 2020 is allowed by the FSC.	January 1, 2020 January 1, 2020 January 1, 2020 June 1, 2020 (Note)

Except for the following, the above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment. Amendment to IFRS 16, ‘Covid-19-related rent concessions’

This amendment provides a practical expedient for lessees from assessing whether a rent concession related to COVID-19, and that meets all the following conditions, is a lease modification:

• A. Changes in lease payments result in the revised consideration for the lease that is substantially the same as, or less than, t����������������������������������������������������������������

• B. ������������������������������������������������������������������������������������������������� and

• C. There is no substantive change to other terms and conditions of the lease.

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Any lease payment changes caused by the rent concessions will be accounted for as variable lease payments during the concession period.

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by

the Group

New standards, interpretations and amendments endorsed by the FSC effective from 2021 are as follows:

New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 4, ‘Extension of the temporary exemption from applying IFRS 9’ Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘Interest Rate Benchmark Reform - Phase 2’	January 1, 2021 January 1, 2021

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

endorsed by the FSC are as follows:
New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 3, ‘Reference to the conceptual framework’ Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ IFRS 17, ‘Insurance contracts’ Amendments to IFRS 17, 'Insurance contracts' Amendments to IAS 1, ‘Classification of liabilities as current or non-current’ Amendments to IAS 1, ‘Disclosure of accounting policies’ Amendments to IAS 8, ‘Definition of accounting estimates’ Amendments to IAS 16, ‘Property, plant and equipment: proceeds before intended use’ Amendments to IAS 37, ‘Onerous contracts — cost of fulfilling a contract’ Annual improvements to IFRS Standards 2018–2020	January 1, 2022 To be determined by International Accounting Standards Board January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2022 January 1, 2022 January 1, 2022

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”).

(2) Basis of preparation

• A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:

• (a) Financial assets at fair value through profit or loss.

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

• (c) Defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation.

• B. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

• A. Basis for preparation of consolidated financial statements:

• (a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, 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. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.

• (b) Inter-company transactions, balances and unrealised gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

• (c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.

• (d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as

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equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity.

B. Subsidiaries included in the consolidated financial statements:

Name of investor	Name of subsidiaries	Main business activities	Ownership (%)	Ownership (%)	Description
			December 31, 2020	December 31, 2019
The Company The Company The Company The Company Supertronic Supertronic Zenicom (HK) Zenitron (HK) Zenitron (HK) Zenitron (HK) Zenitron (HK)	Supertronic International Corp. (Supertronic) Yo-Teh Investment Corporation (Yo-Teh) Raytronic Corporation (Raytronic) Zenitron (HK) Limited (Zenitron (HK)) Zenitron (HK) Zenicom (HK) Limited (Zenicom (HK)) Zenicom Electronic (Shenzhen) Limited (Zenicom (Shenzhen)) Zenitron (Shanghai) International Trading Co., Ltd. (Zenitron (Shanghai)) Zenitron (Shenzhen) Technology Co., Ltd. (Zenitron (Shenzhen)) Shanghai Zenitron Electronic Trading Co., Ltd. (Shanghai Zenitron) ZTHC (Shanghai) Co., Ltd. (ZTHC (Shanghai))	Investment business Investment business Sales of electronic components Sales of electronic components Sales of electronic components Sales of electronic components Sales of electronic components Sales of electronic components Sales of electronic components Sales of electronic components Sales of computer storage device, providing technical service and sales of related components	100.00 100.00 100.00 1.47 98.53 100.00 - 100.00 100.00 100.00 100.00	100.00 100.00 100.00 1.47 98.53 100.00 - 100.00 100.00 100.00 100.00	Note 1 Note 2

• Note 1: Yo-Teh, the subsidiary of the Company reduced its capital, which amounted to $100,833 on June 30, 2020.

Note 2: Zenicom (Shenzhen) had been liquidated on September 30, 2019.

C. Subsidiaries not included in the consolidated financial statements: None.

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• D. Adjustments for subsidiaries with different balance sheet dates: None.

• E. Significant restrictions: None.

• F. Subsidiaries that have non-controlling interests that are material to the Group: None.

• (4) Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in NTD, which is the Company’s functional and the Group’s presentation currency.

• A. Foreign currency transactions and balances

  • (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.

  • (b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.

  • (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet �������������������������������������������������������������������� �!��-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-�������������������"����������������#���������������������������������������� translation differences are recognised in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

  • (d) All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.

• B. Translation of foreign operations

  • The operating results and financial position of all the group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

  • (a) Assets and liabilities for each balance sheet presented are translated at the closing exchange ���������������������������������������

  • (b) Income and expenses for each statement of comprehensive income are translated at average �"��������������������������������

  • (c) All resulting exchange differences are recognised in other comprehensive income.

• (5) Classification of current and non-current items

• A. Assets that meet one of t��������$����������������������������������������������������$������������� classified as non-current assets:

  • (a) Assets arising from operating activities that are expected to be realised, or are intended to be

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sold or consumed within the normal operating c�����

• (b) ����������������������������������������

• (c) �����������������"����������������������$�������$��#�������������������������������������

• (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

• B. %�������������������������������������$���������������������������������������������������������$��������� are classified as non-current liabilities:

• (a) Liabilities th��������"���������������������$���������������������������������

• (b) %�������������������������������������������#������

• (c) %����������������������������������$�������$��#�������������������������������������

• (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(6) Financial assets at fair value through profit or loss

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.

• D. The Group recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

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

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value:

• The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the

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Group and the amount of the dividend can be measured reliably.

• (8) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods.

• B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(9) Impairment of financial assets

• For accounts receivable or contract assets that have a significant financing component, at each reporting date, the Group recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Group recognises the impairment provision for lifetime ECLs.

• (10) Derecognition of financial assets

The Group derecognises a financial asset when one of the following conditions is met:

• A. The contractual rights to receive the cash flows from the financial asset expire.

• B. The contractual rights to receive cash flows of the financial asset have been transferred and the Group has transferred substantially all risks and rewards of ownership of the financial asset.

• C. &������������������������������#����������$���������������������������#����������������������$�#���� the Group has not retained control of the financial asset.

(11) Inventories

• Inventories are stated at the lower of cost and net realisable value. Cost is determined using the moving average method. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the applicable variable selling expenses.

(12) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.

• B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

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• D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change.

The estimated useful lives of property, plant and equipment are as follows:

Buildings and structures 1 ~ 55 year(s) Transportation equipment 1 ~ 5 year(s) Office equipment 1 ~ 15 year(s)

(13) Leasing arrangements (lessee) - right-of-use assets/ lease liabilities

• A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of lowvalue assets, lease payments are recognised as an expense on a straight-line basis over the lease term.

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of fixed payments, less any lease incentives receivable.

• The Group subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost comprising the following:

• (a) &��������������������������������������������������������

• (b) �����������������������������������������������������������

• (c) ����������������������������������������������������

• (d) An estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.

(14) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 50 ~ 55 years.

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(15) Impairment of non-financial assets

The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognising impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

• (16) Borrowings

Borrowings comprise short-term bank borrowings and other short-term loans.

• (17) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods and notes payable are those resulting from operating and non-operating activities.

• B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(18) Derecognition of financial liabilities

A financial liability is derecognised when the obligation specified in the contract is either discharged or cancelled or expires.

(19) Employee benefits

• A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expense in that period when the employees render service.

• B. Pensions

• (a) Defined contribution plans

For defined contribution plans, the contributions are recognised as pension expense when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

• (b) Defined benefit plans

• i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date).

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     - ii. Remeasurements arising on defined benefit plans are recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.

     - iii. Past service costs are recognised immediately in profit or loss.

• C. Employees’ compensation and directors’ remuneration

  • Employees’ compensation and directors’ remuneration are recognised as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the accrued amounts and the subsequently actual distributed amounts resolved by the shareholders is accounted for as changes in estimates.

• (20) Income tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

• C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

• D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.

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(21) Revenue recognition

Sales of goods - agency

• A. The Group is an agency of electronic components. Sales are recognised 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 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, or the Group has objective evidence that all criteria for acceptance have been satisfied. As the time interval between the transfer of committed goods or service and the payment of customer does not exceed one year, the Group does not adjust the transaction price to reflect the time value of money.

• B. A receivable is recognised when the goods are delivered as this is the timing based on trade terms that the consideration is unconditional because only the passage of time is required before the payment is due.

(22) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Company’s chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fina���������������������������������������������������������$'

(1) Valuation of allowance for uncollectible accounts receivable

The assessment of accounts receivable impairment relies on the Company’s judgement and assumption about the recoverable amount of the accounts receivable in the future, taking into account various factors such as client’s financial status, the Company’s internal credit rating, transaction history, current economic condition and others which might affect the client’s repayment ability. Where there is suspicion of recoverability, the Company needs to assess the possible recoverable amount and recognise reasonable allowance. The assessment of impairment depends on reasonable expectation about future events on the basis of the conditions existing at the balance sheet date. The estimation may differ from the actual result and may lead to significant changes.

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(2) Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Group must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Group evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash and cash equivalents
Cash on hand and revolving funds Checking accounts and demand deposits Time deposits	December31,2020 944 $ 1,446,046 229,233 1,676,223 $	December31,2019
		1,792 $ 906,232 290,536
		1,198,560 $

• A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

• B. The Group has no cash and cash equivalents pledged to others.

(2) Financial assets at fair value through profit or loss

		December	31,2020		December	31,2019
Current items
Financial assets mandatorily measured at fair
value through profit or loss
Listed stocks		$	45,927		$	85,097
Unlisted stocks			-			28,598
Emerging stocks			1,163			1,130
			47,090			114,825
Valuation adjustments	(		21,783)	(		44,775)
		$	25,307		$	70,050

• A. The Group recognised net profit amounting to $52,030 and $12,983 on financial assets at fair value through profit or loss for the years ended December 31, 2020 and 2019, respectively.

• B. The Group acquired disposal proceeds amounting to $76,182 from disposing Fresco Logic Inc. in the second quarter of 2020. In accordance with the trading contract, part of the disposal proceeds amounting to US$ 303 thousand will be set aside for any pending expenses, and the remaining amount will be received by the Group one year after the trade date. The Group has not yet recognised such gain on disposal based on the assessment of IAS 37.

• C. The Group has no financial assets at fair value through profit or loss pledged to others as collateral.

• D. Information relating to financial assets at fair value through profit or loss is provided in Note 12(3).

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

Current items Equity instruments Listed stocks Emerging stocks Valuation adjustment Non-current items Equity instruments Unlisted stocks	December31,2020 347,990 $ 2,462 350,452 508,404 858,856 $ 95,894 $	December31,2019
		357,168 $ 2,388
		359,556 307,875
		667,431 $
		110,509 $

• A. The Group has elected to classify stock investments with steady dividend income as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $954,750 and $777,940 as at December 31, 2020 and 2019, respectively. Without considering any collateral held or other credit enhancements, until the end of the reporting period, the maximum credit risk in relation to the financial loss arising from unsatisfied performance obligation of the counterparties is the carrying amount of financial assets.

• B. Aiming to adjust strategic investment, the Group sold $25,892 stock investment at fair value resulting in cumulative gain on disposal of $16,715 during the year ended December 31, 2020.

• C. Amounts recognised in other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

		YearendedDecember31	YearendedDecember31	YearendedDecember31
		2020		2019
Equity instruments at fair value through other
comprehensive income
Fair value change recognised in other
comprehensive income	$	217,244	$	224,144
Cumulative gains reclassified to retained
earnings due to derecognition	($	16,715)	$	-

• D. The Group has no financial assets at fair value through other comprehensive income pledged to others as collateral.

• E. Information relating to fair value of financial assets at fair value through other comprehensive income is provided in Note 12(3).

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(4) Notes and accounts receivable

Notes and accounts receivable
		December	31,2020		December	31,2019
Notes receivable		$	220,785		$	247,446
Accounts receivable		$	9,255,767		$	7,002,403
Less: Allowance for uncollectible accounts	(		109,107)	(		97,944)
		$	9,146,660		$	6,904,459

• A. The Group uses historical experience and takes into consideration the customers’ historical default records, current financial conditions and economic conditions of the industry to estimate expected loss rate in recognising loss allowance. In addition, the Group provides for adequate allowance for uncollectible accounts from individual customers where there is an indication that they are impaired based on specific identification or a credit impairment actually occurred and the customers did not provide any collateral.

• B. The ageing analysis of accounts and notes receivable is as follows:

Not past due Up to 30 days 31 to 90 days Over 90 days	December	Notes receivable 220,785 $ - - - 220,785 $ 31,2020	December	31,2020
	Accounts receivable 8,688,643 $ 301,830 187,497 77,797 9,255,767 $		Accounts receivable 6,437,642 $ 243,239 241,050 80,472 7,002,403 $	Notes receivable
				247,446 $ - - -
				247,446 $

The above ageing analysis was based on past due date.

• C. The Group applies the simplified approach using the provision matrix based on the loss rate methodology to estimate expected credit loss.

• D. The Group adjusts historical and timely information to assess the default possibility of accounts receivable, contract assets and lease payments receivable. On December 31, 2020 and 2019, the provision matrix and loss rate methodology are as follows:

December 31, 2020 Expected loss rate Total accounts receivable December 31, 2019 Expected loss rate Total accounts receivable	0.11%-0.44% 8,688,643 $ 0.3% 6,437,642 $ Notpast due Notpast due	Up to 30 dayspast due 0.11%-2.5% 301,830 $ Up to 30 dayspast due 0.3% 243,239 $	31~90 dayspast due 0.11%-100% 187,497 $ 31~90 dayspast due 0.3% 241,050 $	Over 90 dayspast due 0.11%-100% 77,797 $ Over 90 dayspast due 53.6%-100% 80,472 $	Total
					9,255,767 $
					Total
					7,002,403 $

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• E. Movements in relation to the Group applying the simplified approach to provide loss allowance for accounts receivable are as follows:

			2020			2019
		Accountsreceivable			Accountsreceivable
At January 1		$	97,944		$	110,287
Provision for (reversal of) impairment loss			12,100	(		6,523)
Write-offs	(		480)	(		4,734)
Effect of foreign exchange	(		457)	(		1,086)
At December 31		$	109,107		$	97,944

• F. As of December 31, 2020, December 31, 2019 and January 1, 2019, the balances of receivables (including notes receivable) from contracts with customers amounted to $9,476,552, $7,249,849 and $8,238,879, respectively. Without considering any collateral held or other credit enhancements, until the end of the reporting period, the maximum credit risk in relation to the financial loss arising from unsatisfied performance obligation of the counterparties is the carrying amount of financial assets.

• G. Transferred financial assets that are derecognised in their entirety

The Group entered into a factoring agreement with financial institutions to sell its accounts receivable. Under the agreement, the Group is not obligated to bear the default risk of the accounts receivable but is liable for the losses incurred on any business dispute. The Group meets the condition of financial assets derecognition as it did not provide other collaterals except for issuing a promissory note equal to the facility as the collateral. The Group does not have any continuing involvement in the transferred accounts receivable. Thus, the Group derecognised the transferred accounts receivable, and the related information is as follows:

December 31, 2020

			December	December	31,2020	31,2020
Purchaser of accounts receivable Chang Hwa Bank Bank SinoPac		Accounts receivable transferred 1,564,867 217,716	Amount derecognised 1,564,867 $ 206,831 December		Amount advanced 1,564,867 $ 206,831 31,2019		Amount available for advance - $ 10,885		Interest rate of amount advanced
	$								0.94%~1.16% 0.94%~1.16%
Purchaser of accounts receivable Chang Hwa Bank		Accounts receivable transferred (amount derecognised) 188,511 $		Amount advanced 188,511 $		Amount available for advance - $		Interest rate of amount advanced
								2.94%~3.31%

• H. Transferred financial assets that are not derecognised in their entirety

• (a) The Group entered into a factoring agreement with Chang Hwa Bank to sell its accounts receivable. Under the agreement, the Group transferred the entire accounts receivable and is obligated to provide partial guarantees for the default risk of the transferred accounts receivable. Therefore, the Group did not derecognise these accounts receivable. Related

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advanced payments are recorded under short-term borrowings. As of December 31, 2020, the related information on accounts receivable that were sold but had not reached maturity is as follows:

follows:
Accounts receivable transferred Amount advanced	December31,2020
	427,312 $ USD 15,000 thousand

• (b) There were no transferred financial assets that are not derecognised in their entirety on December 31, 2019.

• I. Information relating to credit risk of accounts receivable and notes receivable is provided in Note 12(2).

(5) Inventories

Inventories
Merchandise inventories Inventories in transit Merchandise inventories Inventories in transit		December31,2020
	6,233,422 $ 556,990 6,790,412 $ Cost	412,900) ($ - 412,900) ($ December31,2019 Allowance for valuation loss	Bookvalue
			5,820,522 $ 556,990
			6,377,512 $
	4,410,597 $ 104,908 4,515,505 $ Cost		Bookvalue
			4,079,763 $ 104,908
			4,184,671 $

The cost of inventories recognised as expense for the year:

Cost of goods sold Loss on decline in market value	YearendedDecember31	YearendedDecember31
	2020 32,640,551 $ 139,432 32,779,983 $	2019
		25,388,134 $ 120,946
		25,509,080 $

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(6) Property, plant and equipment

At January 1, 2020 Cost Accumulated depreciation 2020 Opening net book amount as at January 1 Additions Disposals Depreciation charge Net exchange differences Closing net book amount as at December 31 At December 31, 2020 Cost Accumulated depreciation At January 1, 2019 Cost Accumulated depreciation 2019 Opening net book amount as at January 1 Additions Disposals Depreciation charge Net exchange differences Closing net book amount as at December 31 At December 31, 2019 Cost Accumulated depreciation		Land	Buildings and structures	Transportation equipment	Office equipment	Total
		252,592 $ - 252,592 $ 252,592 $ - - - - 252,592 $ 252,592 $ - 252,592 $ Land	408,193 $ 256,041) ( 152,152 $ 152,152 $ - - 8,091) ( 569 144,630 $ 409,175 $ 264,545) ( 144,630 $ Buildings and structures	52,602 $ 35,212) ( 17,390 $ 17,390 $ 7,888 330) ( 5,065) ( 27 19,910 $ 51,828 $ 31,918) ( 19,910 $ Transportation equipment	110,365 $ 83,299) ( 27,066 $ 27,066 $ 5,851 155) ( 9,809) ( 81) ( 22,872 $ 113,366 $ 90,494) ( 22,872 $ Office equipment	823,752 $ 374,552) ( 449,200 $ 449,200 $ 13,739 485) ( 22,965) ( 515 440,004 $ 826,961 $ 386,957) ( 440,004 $ Total
		252,592 $ - 252,592 $ 252,592 - - - - 252,592 $ 252,592 $ - 252,592 $	410,892 $ 248,422) ( 162,470 $ 162,470 - - 8,532) ( 1,786) ( 152,152 $ 408,193 $ 256,041) ( 152,152 $	54,478 $ 37,293) ( 17,185 $ 17,185 6,493 924) ( 5,290) ( 74) ( 17,390 $ 52,602 $ 35,212) ( 17,390 $	116,447 $ 88,387) ( 28,060 $ 28,060 10,122 385) ( 10,465) ( 266) ( 27,066 $ 110,365 $ 83,299) ( 27,066 $	834,409 $ 374,102) ( 460,307 $ 460,307 16,615 1,309) ( 24,287) ( 2,126) ( 449,200 $ 823,752 $ 374,552) ( 449,200 $

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(7) Lease arrangements – lessee

Right-of-use assets: Buildings and structures Lease liabilities: Current Non-current	December31,2020 98,306 $ 40,234 $ 59,073 99,307 $	December31,2019
		21,563 $
		20,499 $ 1,216
		21,715 $

• A. The Group leases various assets including buildings. Rental contracts are typically made for periods of 1 to 3 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

• B. Short-term leases with a lease term of 12 months or less comprise transportation equipment, buildings and structures. Low-value assets comprise office equipment. Right-of-use asset and lease liabilities were not recognised for these leases.

• C. The depreciation charges on right-of-use assets are as follows:

Buildings and structures	YearendedDecember31	YearendedDecember31
	2020 44,026 $	2019
		44,513 $

• D. For the years ended December 31, 2020 and 2019, the additions to right-of-use assets were $120,324 and $2,181, respectively.

• E. Except for the depreciation charge, the information on profit or loss in relation to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term leases and leases of low-value assets	YearendedDecember31	YearendedDecember31
	2020 2,195 $ 13,534	2019
		1,278 $ 15,904

• F. For the years ended December 31, 2020 and 2019, the Group’s total cash outflow for leases were $57,883 and $61,451, respectively.

• G. The Group has applied the practical expedient to “Covid-19-related rent concessions”, and recognised the gain from changes in lease payments arising from the rent concessions amounting to $1,435 by increasing other income for the year ended December 31, 2020.

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� (8) Lease arrangements lessor

For the years ended December 31, 2020 and 2019, the Group recognised rent income in the amounts of $6,886 and $6,895, respectively, based on the operating lease agreement, which does not include variable lease payments.

(9) Investment property

January 1, 2020 Cost Accumulated depreciation and impairment 2020 Opening net book amount as at January 1 Depreciation charge Closing net book amount as at December 31 December 31, 2020 Cost Accumulated depreciation and impairment January 1, 2019 Cost Accumulated depreciation and impairment 2019 Opening net book amount as at January 1 Depreciation charge Closing net book amount as at December 31 December 31, 2019 Cost Accumulated depreciation and impairment

Land Buildings Total $ 32,466 $ 29,941 $ 62,407 ( 15,410) (9,418) ( 24,828) 17,056 $ 20,523 $ 37,579 $ $ 17,056 $ 20,523 $ 37,579 - (543) (543) $17,056 $19,980 $ 37,036 $ 32,466 $ 29,941 $ 62,407 ( 15,410) (9,961) ( 25,371) 17,056 $ 19,980 $ 37,036 $ Land Buildings Total $ 32,466 $ 29,941 $ 62,407 ( 15,410) (8,874) ( 24,284) 17,056 $ 21,067 $ 38,123 $ $ 17,056 $ 21,067 $ 38,123 - (544) (544) $17,056 $20,523 $ 37,579 $ 32,466 $ 29,941 $ 62,407 ( 15,410) (9,418) ( 24,828) 17,056 $ 20,523 $ 37,579 $

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• A. Rental income from investment property and direct operating expenses arising from investment property are shown below:

property are shown below:
Rental revenue from investment property Direct operating expenses arising from the investment property that generated rental income during the year	YearendedDecember31
	2020 2,546 $ 543 $	2019
		2,546 $
		544 $

• B. The fair value of the investment property held by the Group was $95,101 and $91,476 as of December 31, 2020 and 2019, respectively, which were based on the trading prices of nearby areas.

• C. Refer to Note 8 for further information on investment property pledged to others as collateral.

(10) Short-term borrowings

Short-term borrowings
Unsecured borrowings Interest rate range	December31,2020 8,668,103 $ 0.64%~4.25%	December31,2019
		5,512,308 $
		1%~4.79%

• A. For the years ended December 31, 2020 and 2019, the interest expense recognised in profit or loss amounted to $106,397 and $165,125, respectively.

• B. As of December 31, 2020 and 2019, the Group provided collaterals for the financing facility of short-term borrowings and issued guaranteed notes as collateral in the amount of $15,271,888 and $15,441,663, respectively.

(11) Short-term notes and bills payable

Short-term notes and bills payable
			December31,2020		December31,2019
Short-term notes and bills payable		$	550,000		$	500,000
Discount on short-term notes and bills payable	(		494)	(		519)
		$	549,506		$	499,481
Coupon rate			1%~1.2%			1%~1.2%

The abovementioned commercial paper was secured by financial institutions.

(12) Pensions

• A. (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Act, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee.

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(b) The amounts recognised in the balance sheet are as follows:

		December	31,2020		December	31,2019
Present value of defined benefit obligations		$	84,217		$	80,044
Fair value of plan assets	(		18,965)	(		19,246)
Net defined benefit liability		$	65,252		$	60,798

(c) Movements in net defined benefit liabilities are as follows:

		Present value of	Present value of
		defined benefit				Fair value of			Net defined
			obligations			planassets		benefitliability
2020
Balance at January 1	($		80,044)		$	19,246	($		60,798)
Past service cost			1,444			-			1,444
Interest (expense) income	(		592)			137	(		455)
	(		79,192)			19,383	(		59,809)
Remeasurements:
Return on plan assets			-			632			632
Change in demographic
assumptions	(		465)			-	(		465)
Change in financial assumptions	(		3,702)			-	(		3,702)
Experience adjustments	(		2,088)			-	(		2,088)
	(		6,255)			632	(		5,623)
Paid pension			1,230	(		1,230)			-
Pension fund contribution			-			180			180
Balance at December 31	($		84,217)		$	18,965	($		65,252)
		Present value of
		defined benefit				Fair value of			Net defined
			obligations			planassets		benefitliability
2019
Balance at January 1	($		78,464)		$	18,234	($		60,230)
Interest (expense) income	(		775)			174	(		601)
	(		79,239)			18,408	(		60,831)
Remeasurements:
Return on plan assets			-			658			658
Change in demographic
assumptions			9			-			9
Change in financial assumptions	(		2,017)			-	(		2,017)
Experience adjustments			1,203			-			1,203
	(		805)			658	(		147)
Pension fund contribution			-			180			180
Balance at December 31	($		80,044)		$	19,246	($		60,798)

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• (d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-thecounter, or private placement equity securities, investment in domestic or foreign real estate securitisation products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2020 and 2019 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

• (e) The principal actuarial assumptions used were as follows:

The principal actuarial assumptions used were	as follows:	as follows:
Discount rate Future salary increases	YearendedDecember31
	2020 0.30% 2.00%	2019
		0.75%
		2.00%

Assumptions regarding future mortality experience are set based on actuarial advice in accordance with statistics and experience of the 5th Taiwan Standard Ordinary Experience Mortality Table.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

Increase 0.25% Decrease 0.25% December 31, 2020 Effect on present value of defined benefit obligation 2,061) ($ 2,139 $ December 31, 2019 Effect on present value of defined benefit obligation 2,016) ($ 2,095 $ Discount rate	Increase 0.25% Decrease 0.25% 2,097 $ 2,032) ($ 2,064 $ 1,997) ($ Future salaryincreases

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

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• (f) Expected contributions to the defined benefit pension plan of the Group for the year ending December 31, 2021 amount to $180.

• (g) As of December 31, 2020, the weighted average duration of the retirement plan is 9 years. The analysis of timing of the future pension payment was as follows:

The analysis of timing of the future pension payment was as follows:
Within 1 year 1-2 year(s) 2-5 years Over 5 years	2,421 $ 3,767 20,562 59,483
	86,233 $

• B. (a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount not lower than 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment. The pension costs under the defined contribution pension plans of the Group for the years ended December 31, 2020 and 2019 were $14,710 and $14,540, respectively.

  • (b) The overseas subsidiaries, Zenitron (HK) Limited, Zenitron (Shanghai) International Trading Co., Ltd, Zenitron (Shenzhen) Technology Co. Ltd., ZTHC (Shanghai) Co., Ltd., Zenicom Electronic (Shenzhen) Limited and Shanghai Zenitron Electronic Trading Co., Ltd, have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the local pension regulations are based on a certain percentage of employees’ monthly salaries and wages. Other than the monthly contributions, aforementioned companies have no further obligations. For the years ended December 31, 2020 and 2019, the amount of pension expenses that were recognised were $3,880 and $29,674, respectively.

• C. The overseas subsidiaries, Supertronic International Corp., Zenicom (HK) Limited and domestic subsidiaries, Yo-Teh Investment Corporation and Raytronic Corporation, have no employees, thus, they have no pension plan.

• (13) Share capital

• A. As of December 31, 2020, the Company’s authorised capital was $3,500,000, consisting of 350 million shares of ordinary stock (including 20 million shares reserved for employee stock options), and the paid-in capital was $2,138,249 with a par value of $10 (in dollars) per share.

• B. As of December 31, 2020 and 2019, the beginning and ending number of outstanding shares were both 213,825 thousand shares.

• (14) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to

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issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paidin capital each year. However, capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

(15) Retained earnings \ events after the balance sheet date

• A. In accordance with the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve, and setting aside or reversal of special reserve in accordance with related laws, if any. The remaining earnings are the distributable earnings for the year.

• B. Dividend policy:

• (a) The distribution of dividends shall be above 50% of the current year’s distributable earnings and the cash dividends distributed shall not be lower than 20% of the current actual earnings distributed.

• (b) The Board of Directors is authorised to distribute all or part of the dividends and bonus in cash through a resolution adopted by a majority vote at a meeting of the Board of Directors attended by two-thirds of the total number of directors which shall be reported to the shareholders during their meeting.

• (c) When the Company has no deficit, the Board of Directors is authorised to distribute all or part of the legal reserve (for the part that exceeds 25% of paid-in capital) and capital surplus if it meets the requirements under the Company Act in cash through a resolution adopted by a majority vote at a meeting of the Board of Directors attended by two-thirds of the total number of directors which shall be reported to the shareholders during their meeting.

• C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

• D. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

• E. The appropriations of 2019 and 2018 earnings as resolved by the shareholders on June 12, 2020 and June 12, 2019, respectively are as follows:

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(a) The distribution of 2019 and 2018 earnings were as follows:

Legal surplus Cash dividends	Dividend per share and cashdistributed 23,046 $ 207,600 0.9708 $ 230,646 $ 2019 Amount	2018
	23,046 $ 207,600 230,646 $ Amount	Dividend per share and cashdistributed 40,664 $ 363,500 1.70 $ 404,164 $ Amount

• (b) For the year ended December 31, 2019, the cash payment from capital surplus was $0.0294 per share, totaling $6,300 .

• F. Events after the balance sheet date

On March 22, 2021, the Company’s Board of Directors proposed the distribution of 2020 earnings as follows:

earnings as follows:
Legal surplus Cash dividends	2020
	Amount 48,424 $ 406,300 454,724 $	Dividend per share and cash distributed
		1.90 $

The aforementioned distribution of 2020 earnings has not yet been resolved by the shareholders. (16) Operating revenue

Operating revenue
Revenue from contracts with customers	YearendedDecember31
	2020 34,401,169 $	2019
		26,992,869 $

The Group derives revenue from the transfer of goods at a point in time in the following geographical regions:

Year ended December31,2020 Revenue from external customer contracts Year ended December31,2019 Revenue from external customer contracts	China 30,326,197 $ China 22,669,586 $	Taiwan 3,301,677 $ Taiwan 3,874,510 $	Others 773,295 $ Others 448,773 $	Total
				34,401,169 $
				Total
				26,992,869 $

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(17) Other income

Other income
Rent income Advertising income Dividend income Other income	Year ended December31
	2020 6,886 13,131 26,654 27,629 74,300 $	2019
		6,895 11,100 23,782 32,437
		74,214 $

(18) Other gains and losses

Other gains and losses
			YearendedDecember31
			2020	2019
Foreign exchange gains		$	117,400	$	19,792
Gains on financial assets at fair value through
profit or loss			52,030		12,983
Gains (losses) on disposals of property, plant
and equipment			196	(	396)
Others	(		110)		941
		$	169,516	$	33,320

(19) Finance costs

Finance costs
Interest expense Other interest expense	YearendedDecember31
	2020 106,397 $ 15,765 122,162 $	2019
		165,125 $ 28,102
		193,227 $

(20) Expenses by nature

Expenses by nature
Employee benefit expense Salary expenses Labour and health insurance fees Pension costs Other personnel expenses Depreciation Amortisation	YearendedDecember31
	2020 636,883 $ 36,331 17,601 33,504 67,534 4,166	2019
		528,961 $ 41,903 44,815 33,287 69,344 4,593

• A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ remuneration. The ratio shall be 3%~12% for employees’ compensation and shall not be higher than 3% for directors’ remuneration.

• B. The Company’s directors’ remuneration and employees’ compensation accounted as operating expenses were as follows:

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Directors’ remuneration Employees’ compensation	YearendedDecember31	YearendedDecember31
	2020 15,000 $ 18,000 33,000 $	2019
		6,000 $ 9,000
		15,000 $

• C. For the year ended December 31, 2020, the employees’ compensation and directors’ remuneration were estimated and accrued based on a certain percentage of distributable profit of current year as of the end of reporting period.

• D. The employees’ compensation of $9,000 and directors’ remuneration of $6,000 for 2019 were resolved by the Board of Directors and were in agreement with those amounts recognised in the 2019 financial statements.

• E. Information about employees’ compensation and directors’ remuneration of the Company as resolved at the meeting of the Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

• (21) Income taxes

• A. Income tax expense

  • (a) Components of income tax expense:

Components of income tax expense:
			YearendedDecember31
			2020	2019
Current tax:
Currrent tax on profits for the year		$	99,075	$	78,339
Prior year income tax (over)
underestimation	(		2,473)		12,052
Total current tax			96,602		90,391
Deferred tax:
Origination and reversal of temporary
differences	(		13,571)	(	13,545)
Total deferred tax	(		13,571)	(	13,545)
Income tax expense		$	83,031	$	76,846

• (b) The income tax (charge)/credit relating to components of other comprehensive income is as follows:

follows:
Remeasurement of defined benefit obligations	YearendedDecember31
	2020 1,124 $	2019
		30 $

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B. Reconciliation between income tax expense and accounting profit:

			YearendedDecember31	YearendedDecember31
			2020	2019
Tax calculated based on profit before tax and		$	179,747	$	81,906
statutory tax rate
Effects from items disallowed by tax regulation	(		94,243)	(	17,112)
Prior year income tax overestimation	(		2,473)	(	12,052)
Income tax expense		$	83,031	$	52,742

C. Amounts of deferred tax assets or liabilities as a result of temporary differences are as follows:

January1 Deferred tax assets (liabilities): Unrealised loss on valuation loss and slow-moving inventories 38,102 $ Unrealised loss on doubtful debts 4,346 Unpaid salary 2,010 Unrealised actuarial loss on defined benefit plan 4,351 Share of profit of subsidiaries accounted for using equity method 114,468) ( 65,659) ($		2020
		Recognised in profit or loss 11,767 $ 1,090 714 - - 13,571 $

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Recognised in Recognised in other comprehensive January1 profit or loss income December31 Deferred tax assets (liabilities): Unrealised loss on valuation loss and slow-moving inventories 23,918 $ 14,184 $ - $ 38,102 $ Unrealised loss on doubtful debts 5,105 759) ( - 4,346 Unpaid salary 1,890 120 - 2,010 Unrealised actuarial loss on defined benefit plan 4,321 - 30 4,351 Share of profit of subsidiaries accounted for using equity method 114,468) ( - - 114,468) ( 79,234) ($ 13,545 $ 30 $ 65,659) ($ 2019		2019	2019
			Recognised in other comprehensive income December31 - $ 38,102 $ - 4,346 - 2,010 30 4,351 - 114,468) ( 30 $ 65,659) ($	December31

• D. The amounts of deductible temporary differences that were not recognised as deferred tax assets are as follows:

are as follows:
Deductible temporary differences	December31,2020 184,415 $	December31,2019
		243,718 $

E. The Company’s and domestic subsidiaries’ income tax returns through 2017 and 2018 have been assessed and approved by the Tax Authority, respectively.

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(22) Earnings per share

Earnings per share
Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Weighted average number of ordinary shares outstanding Earnings per Profit after tax (shares in thousands) share(in dollars) 472,025 $ 213,825 2.21 $ 472,025 $ 213,825 - 946 472,025 $ 214,771 2.20 $ Year ended December 31,2020 Weighted average number of ordinary shares outstanding Earnings per Profit after tax (shares in thousands) share(in dollars) 230,581 $ 213,825 1.08 $ 230,581 $ 213,825 - 576 230,581 $ 214,401 1.08 $ Year ended December 31,2019
		Weighted average number of ordinary shares outstanding (shares in thousands) 213,825 213,825 576 214,401	Earnings per share(in dollars)
			1.08 $
			1.08 $

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(23) Changes in liabilities from financing activities

										Liabilities from	Liabilities from
			Short-term	Short-term notes							financing
			borrowings	and	bills payable		Lease	liabilities		activities-gross
January 1, 2020		$	5,512,308	$	499,481		$	21,715		$	6,033,504
Changes in cash flow
from financing
activities			3,155,795		50,025	(		42,154)			3,163,666
Changes in other
non-cash items			-		-			119,746			119,746
December 31, 2020		$	8,668,103	$	549,506		$	99,307		$	9,316,916
										Liabilities from
			Short-term	Short-term notes							financing
			borrowings	and	billspayable		Lease	liabilities		activities-gross
January 1, 2019		$	7,381,295	$	599,402		$	64,130		$	8,044,827
Changes in cash flow
from financing
activities	(		1,868,987)	(	99,921)	(		42,776)	(		2,011,684)
Changes in other
non-cash items			-		-			361			361
December 31, 2019		$	5,512,308	$	499,481		$	21,715		$	6,033,504

7. RELATED PARTY TRANSACTIONS

Key management compensation

Key management compensation
Salaries and other short-term employee benefits	YearendedDecember31
	2020 $46,314	2019
		$ 36,845

8. PLEDGED ASSETS

The Group’s assets pledged as collateral are as follows:

Pledged assets Accounts receivable, net: Accounts receivable as collateral Investment property Guarantee deposits paid (shown as ‘other non-current assets’)	December 31, December 31, 2020 2019 427,312 $ - $ 2,945 3,023 10,000 10,000 440,257 $ 13,023 $ Book value	Purpose
	December 31, 2020 427,312 $ 2,945 10,000 440,257 $
		Short-term borrowings Short-term borrowings Court deposits

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9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS

(1) Contingencies

None.

(2) Commitments

As of December 31, 2020, other significant commitments were as follows:

As a requirement for the release of imported goods before duty and customs clearance, the Group has applied for customs guarantee with certain banks in the amount of $20,000.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

The distribution of 2020 earnings was resolved by the Company’s Board of Directors on March 22, 2021. Please refer to Note 6(15) for more details.

12. OTHERS

(1) Capital risk management

The Group’s main objective when managing capital is to maintain an optimal credit ranking and capital ratio to support the operations and to maximize stockholders’ equity. Please refer to the consolidated balance sheet of each period for related liabilities and capital ratio.

(2) Financial instruments

A. Financial instruments by category

Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instrument Financial assets at amortised cost/receivables Cash and cash equivalents Notes receivable Accounts receivable Other receivables Guarantee deposits paid (shown as ‘other non- current assets)	December31,2020 25,307 $ 954,750 $ 1,676,223 $ 220,785 9,146,660 100,253 57,581 11,201,502 $	December31,2019
		70,050 $
		777,940 $
		1,198,560 $ 247,446 6,904,459 105,692 56,443
		8,512,600 $

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December 31, 2020 December 31, 2019

	December31,2020	December31,2019
Financial liabilities Financial liabilities at amortised cost Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Other accounts payable Guarantee deposits received (shown as ‘other non-current assets’) Lease liabilities	8,668,103 $ 549,506 2,528 4,403,301 447,222 3,139 14,073,799 $ 99,307 $	5,512,308 $ 499,481 3,664 3,185,177 324,944 7,936
		9,533,510 $
		21,715 $

• B. Financial risk management policies

• (a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Group’s financial risk management policies is to identify and analyse all the risks by examining the impact of the macroeconomics, industrial developments, market competition and the Group’s business development so as to achieve the optimised risk position, to maintain adequate liquidity position and to centralise the management of all market risks.

• (b) Risk management is carried out by a central treasury department (Group treasury) under policies approved by the Board of Directors. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

• i. The Group operates internationally and is exposed to foreign exchange risk arising from various currency, primarily with respect to the USD and RMB. Foreign exchange rate risk arises from future commercial transactions and recognised assets and liabilities.

• ii. The Group’s businesses involve some non-functional currency operations (the Company’s ������������������������(��������������������'�!&)����������������������������(������������ currency: USD, RMB and HKD). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

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December 31, 2020

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD JPY:NTD RMB:NTD USD:HKD (Note) JPY:HKD (Note) Financial liabilities Monetary items USD:NTD JPY:NTD USD:HKD (Note) USD:RMB (Note) JPY:HKD (Note)	Foreign currency amount (In thousands)	Exchange rate	Book value (In thousands of NTD)		Sensitivityanalysis	Sensitivityanalysis
				Degree of variation	Effect on profit or loss	Effect on other comprehensive income
	199,209 $ 230,186 55,091 233,273 63,162 281,890 $ 53,597 160,790 7,175 46,403	28.43 0.27 4.35 7.76 0.08 28.53 0.28 7.76 6.52 0.08	5,663,512 $ 62,150 239,646 6,631,961 17,054 8,042,322 $ 15,007 4,587,339 204,703 12,993	1% 1% 1% 1% 1% 1% 1% 1% 1% 1%	56,635 $ 622 2,396 66,320 171 80,423 $ 150 45,873 2,047 130	- $ - - - - - $ - - - -

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD JPY:NTD RMB:NTD USD:HKD (Note) Financial liabilities Monetary items USD:NTD JPY:NTD USD:HKD (Note) USD:RMB (Note)			December 31,2019	December 31,2019
	Foreign currency amount (In thousands)	Exchange rate	Book value (In thousands of NTD)		Sensitivityanalysis
				Degree of variation	Effect on profit or loss	Effect on other comprehensive income
	142,764 $ 181,021 54,037 104,322 148,837 $ 135,897 90,537 7,613	29.93 0.27 4.28 7.79 30.03 0.28 7.79 6.98	4,272,927 $ 48,876 231,278 3,122,357 4,469,575 $ 38,051 2,718,826 228,618	1% 1% 1% 1% 1% 1% 1% 1%	42,729 $ 489 2,313 31,224 44,696 $ 381 27,188 2,286	- $ - - - - $ - - -

Note: The functional currencies of certain consolidated entities are not NTD, thus, this information must be considered when reporting. For example, when a subsidiary’s functional currency is RMB, the subsidiary’s segments that are involved with USD must be taken into consideration.

• iii. The total exchange gain, including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2020 and 2019, amounted to $117,400 and $19,792, respectively.

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(b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. According to the Group’s credit policy, the Group is responsible for managing and analysing the credit risk for each of their clients. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. The utilisation of credit limits is regularly monitored. Credit risk arises from credit exposures to customers, including outstanding receivables.

• ii. The Group adopts the following assumptions to assess whether there has been a significant increase in credit risk on that instrument since initial recognition:

  • (i) If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

  • (ii) If any external credit rating agency rates these bonds as investment grade, the credit risk of these financial assets is low.

• iii. The default occurs when the contract payments are past due over 60 days.

• iv. The Group classifies customer’s accounts receivable in accordance with the credit rating of the customer. The Group applies the modified approach using a provision matrix to estimate the expected credit loss.

• v. The Company wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Group will continue executing the recourse procedures to secure their rights.

• vi. The Group used the forecastability to adjust historical and timely information to assess the default possibility of accounts receivable. Please refer to Note 6(4) for details of the provision matrix and movements in loss allowance for the years ended December 31, 2020 and 2019.

• (c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets.

• ii. Except for those listed in the table below, the Group’s non-derivative financial liabilities will expire within 1 year. As of December 31, 2020 and 2019, the cash flows within 1 year of short-term borrowings, short-term notes and bills payable, notes payable, accounts payable and other payables are undiscounted and are in agreement with the balance of each account in the balance sheets.

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December 31, 2020 Non-derivative financial liabilities: Lease liabilities December 31, 2019 Non-derivative financial liabilities: Lease liabilities	Less than 1year $43,538 Less than 1year $20,887	Between 2 and 5 years $ 61,061 Between 2 and 5 years $1,278	Over5 years
			- $
			Over5 years
			- $

• iii. The Group does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis will be significantly earlier, nor expect the actual cash flow amount will be significantly different.

(1) Fair value information

• A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. An active market refers to a market in which transactions for an asset or liability take place with enough frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks and OTC stocks is included in Level 1.

• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

• Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in equity investment without active market is included in Level 3.

• B. Financial and non-financial instruments measured at fair value

• (a) The related information on financial and non-financial instruments measured at fair value by level based on the nature, characteristics and risks of the assets and liabilities are as follows:

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December 31, 2020 Level 1 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Listed stocks 25,054 $ Emerging stocks 253 Financial assets at fair value through other comprehensive income Listed stocks 858,283 Emerging stocks 573 Unlisted stocks - 884,163 $ December 31, 2019 Level 1 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Listed stocks 41,235 $ Emerging stocks 217 Unlisted stocks - Financial assets at fair value through other comprehensive income Listed stocks 666,941 Emerging stocks 490 Unlisted stocks - 708,883 $	Level 2 - $ - - - - - $ Level 2 - $ - - - - - - $	Level3 - $ - - - 95,894 95,894 $ Level3 - $ - 28,598 - - 110,509 139,107 $	Total
			25,054 $ 253 858,283 573 95,894
			980,057 $
			Total
			41,235 $ 217 28,598 666,941 490 110,509
Financial assets at fair value through profit or loss Listed stocks Emerging stocks Unlisted stocks Financial assets at fair value through other comprehensive income Listed stocks Emerging stocks Unlisted stocks
			847,990 $

• (b) The methods and assumptions the Group used to measure fair value are as follows:

• i. For the instruments the Group used market quoted prices as their fair values (that is, Level 1), the Group uses the closing price as market quoted price.

• ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date.

~163~

• iii. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk, etc. In accordance with the Group’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.

• iv. The Group considers adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Group’s credit quality.

• C. For the years ended December 31, 2020 and 2019, there was no transfer between Level 1 and Level 2.

• D. The following chart is the movement of Level 3 for the years ended December 31, 2020 and 2019:

			2020			2019
At January 1		$	139,107		$	137,772
Acquired in the period			-			27,500
Sold in the period	(		28,598)			-
Proceeds from capital reduction	(		11,392)	(		24,728)
Effect of exchange rate changes	(		3,223)	(		1,437)
At December 31		$	95,894		$	139,107

• E. Investment segment is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating, updating inputs used to the valuation model and making any other necessary adjustments to the fair value.

• F. The following is the qualitative information on significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

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Non-derivative equity instrument: Unlisted shares Non-derivative debt instrument: Unlisted shares		Fair value at December 31, 2020	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fair value
		95,894 $ Fair value at December 31, 2019	Net asset value Valuation technique	Not applicable Significant unobservable input	Not applicable Range (weighted average)	Not applicable Relationship of inputs to fair value
		28,598 $	Market comparable companies	Price to book ratio multiple and discount for lack of marketability	Not applicable	The higher the multiple and control premium, the higher the fair value The higher the discount for lack of marketability, the lower the fair value

Non-derivative equity instrument: Unlisted shares $ 27,500 Most recent Not applicable Not applicable Not applicable non-active market price Unlisted shares 83,009 Net asset value Not applicable Not applicable Not applicable $ 110,509

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

• A. Loans to others: Please refer to table 1.

• B. Provision of endorsements and guarantees to others: Please refer to table 2.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.

• D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital: None.

• E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.

• F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.

• G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 4.

• H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 5.

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• I. Trading in derivative instruments undertaken during the reporting periods: None.

• J. Significant inter-company transactions during the reporting periods: Please refer to table 6.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 7.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 8.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to Notes 13(1) A, B and J.

(4) Major shareholders information

The Company has no shareholders with a shareholding ratio above 5%.

14. SEGMENT INFORMATION

(1) General information

The Group operates business only in a single industry. The Board of Directors who allocates resources and assesses performance of the Group as a whole, has identified that the Group has only one reportable operating segment.

(2) Segment information

The pre-tax net income is used to measure the operating segment profit (loss) and performance of

the operating segments. The segment information provided to the chief operating decision-maker for the reportable segments is as follows:

for the reportable segments is as follows:
Segment revenue Segment income Segment income, including: Depreciation and amortisation	YearendedDecember31
	2020 34,401,169 $ 472,025 $ 71,700 $	2019
		26,992,869 $
		230,581 $
		73,937 $

(3) Reconciliation for segment income (loss)

• A. The revenue from external customers reported to the Board of Directors is measured in a manner consistent with that in the statement of comprehensive income.

• B. The Group’s Board of Directors assesses performance of operating segments and allocates resources based on pre-��"�����������������������������������������������

(4) Information on products and services

Revenue from external customers is mainly from sales of electronic components.

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(5) Geographical information

Geographical information for the years ended December 31, 2020 and 2019 is as follows:

Year ended December 31

China Taiwan Others	Non-current Revenue assets 30,326,197 $ 178,183 $ 3,301,677 462,454 773,295 34,401,169 $ 640,637 $ 2020	2019	2019
	Revenue 30,326,197 $ 3,301,677 773,295 34,401,169 $	Revenue 22,669,586 $ 3,874,510 448,773 26,992,869 $	Non-current assets
			104,296 $ 470,107 -
			574,403 $

(6) Major customer information

Major customer information of the Group for the years ended December 31, 2020 and 2019 is as follows:

A

Year ended December31	Year ended December31
2020 Revenue 6,350,843 $	2019
	Revenue
	2,969,687 $

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Zenitron Corporation and Subsidiaries Loans to others

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

Year ended December 31, 2020

Amount of transactions with the borrower (Note 5) Reason for short- term financing (Note 6) Allowance for doubtful accounts Maximum outstanding balance during the year ended December 31, 2020 (Note 3) Balance at December 31, 2020(Note 8) Actual amount drawn down Interest rate Nature of loan (Note 4) No. (Note 1) Creditor Borrower General ledger account (Note 2) Is a related party	Collateral	Limit on loans granted to a single party (Note 7)	Ceiling on total loans granted (Note 7)	Footnote
	Item Value
0 Zenitron Coporation ZTHC (Shanghai) Co., Ltd. Other receivables Yes $ 749,450 $ 609,280 $ 217,600 2.50% 2 - $ Operating capital - $ 1 ZTHC (Shanghai) Co., Ltd. Zenitron (Shanghai) International Trading Co., Ltd. Other receivables Yes 87,600 87,600 - - 2 - Operating capital - 1 ZTHC (Shanghai) Co., Ltd. Zenitron (Shenzhen) Technology Co., Ltd. Other receivables Yes 262,800 262,800 109,500 2.50% 2 - Operating capital - 2 Shanghai Zenitron Electronic Trading Co., Ltd Zenitron (Shanghai) International Trading Co., Ltd. Other receivables Yes 52,560 52,560 43,800 4.35% 2 - Operating capital - 3 Yo-Teh Investment Corporation Raytronic Corporation Other receivables Yes 20,000 - - - 2 - Operating capital -	- - $ - - - - - - - -	$ 1,920,623 652,676 652,676 179,198 23,070	$ 1,920,623 652,676 652,676 179,198 23,070

• Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:

• (1) The Company is ‘0’.

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

• Note 2: The name of account in which the loans are recognised, such as receivables–related parties, current account with stockholders, prepayments, temporary payments, etc.

• Note 3: The maximum outstanding balance of loans to others for the year.

• Note 4: The nature of the loan as follows:

• (1)‘1’ for business transaction.

• (2)‘2’ for short-term financing.

• Note 5: The amount of business transactions when nature of the loan is 1, which is the amount of business transactions occurred between the creditor and borrower in the current year.

• Note 6: Purpose of loan when nature of loan is 2, for example, repayment of loan, acquisition of equipment, working capital, etc.

• Note 7: Limit on loans granted to a single party and ceiling on total loans granted as prescribed in the creditor company’s “Procedures for Provision of Loans”, the calculation and amount are as follows:

(1) Limit on loans granted to a single party is 40% of the creditor company’s net assets based on the latest financial statements.

• (2) Ceiling on total loans granted is 40% of the creditor company’s net assets based on the latest financial statements.

• (3) Limit on loans granted between foreign companies which the Company directly or indirectly holds 100% of their voting shares is 200% of the creditor company’s net assets based on the latest financial statements.

• Note 8: The amounts of funds to be loaned to others which have been approved by the board of directors of a public company in accordance with Article 14, Item 1 of the “Regulations Governing Loaning of Funds and Making of

• Endorsements/Guarantees by Public Companies” should be included in its published balance of loans to others at the end of the reporting period to reveal the risk of loaning the public company bears, even though they have not yet been appropriated.

• However, this balance should exclude the loans repaid when repayments are done subsequently to reflect the risk adjustment. In addition, if the board of directors of a public company has authorized the chairman to loan funds in instalments

or in revolving within certain lines and within one year in accordance with Article 14, Item 2 of the “Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies”,

the published balance of loans to others at the end of the reporting period should also include these lines of loaning approved by the board of directors, and these lines of loaning should not be excluded from this balance even though

the loans are repaid subsequently, for taking into consideration they could be loaned again thereafter.

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Zenitron Corporation and Subsidiaries

Expressed in thousands of NTD (Except as otherwise indicated)

Provision of endorsements and guarantees to others

Year ended December 31, 2020

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Table 2
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Number (Note 1) Endorser/ guarantor	Party being endorsed/guaranteed	Limit on endorsements/ guarantees provided for a single party (Note 3)	Maximum outstanding endorsement/ guarantee amount as of December 31, 2020 (Note 4)	Outstanding endorsement/ guarantee amount at December 31, 2020 (Note 5)	Actual amount drawn down (Note 6)	Amount of endorsements/ guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/guarantor company	Ceiling on total amount of endorsements/ guarantees provided (Note 3)	Provision of endorsements/ guarantees by parent company to subsidiary (Note 7)	Provision of endorsements/ guarantees by subsidiary to parent company (Note 7)	Provision of endorsements/ guarantees to the party in Mainland China (Note 7)	Footnote
	Companyname Relationship with the endorser/ guarantor (Note2)
0 Zenitron Coporation 0 Zenitron Coporation 0 Zenitron Coporation 0 Zenitron Coporation	Zenitron (HK) Limited 3 Zenitron (Shenzhen) Technology Co., Ltd. 3 Zenitron (Shanghai) International Trading Co., Ltd. 3 ZTHC (Shanghai) Co., Ltd. 3	7,202,337 $ 7,202,337 7,202,337 7,202,337	2,109,080 $ 538,160 658,929 462,200	2,086,640 $ 536,600 657,060 455,580	997,208 $ 158,856 294,079 -	- $ - - -	43.46% 11.18% 13.68% 9.49%	7,202,337 $ 7,202,337 7,202,337 7,202,337	Y Y Y Y	N N N N	N Y Y Y

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

• (1) The Company is ‘0’.

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

Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following six categories; fill in the number of category each case belongs to: (1) Having business relationship.

(2) The endorser/guarantor parent company owns directly more than 50% voting shares of the endorsed/ guaranteed subsidiary.

• (3) The endorser/guarantor parent company and its subsidiaries jointly own more than 50% voting shares of the endorsed/ guaranteed company.

• (4) The endorsed/guaranteed parent company directly or indirectly owns more than 50% voting shares of the endorser/guarantor subsidiary.

• (5) Mutual guarantee of the trade as required by the construction contract.

(6) Due to joint venture, each shareholder provides endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

Note 3: The calculation for and amount of limit on endorsements/guarantees are as follows: (If any contingent loss is recognised in the financial statements, the recognised amount should be indicated)

(1) Limit on endorsements/guarantees provided for a single party is 150% of the Company’s net assets.

(2) Ceiling on total amount of endorsements/guarantees is 150% of the Company's net assets.

Note 4: The year-to-date maximum outstanding balance of endorsements/guarantees provided as of the reporting period.

Note 5: Once endorsement/guarantee contracts or promissory notes are signed/issued by the endorser/guarantor company to the banks, the endorser/guarantor company bears endorsement/guarantee liabilities. And all other events involve endorsements and guarantees should be included in the balance of outstanding endorsements and guarantees.

Note 6: The actual amount of endorsements/guarantees used by the endorsed/guaranteed company.

Note 7:‘Y’ for those cases of provision of endorsements/guarantees by listed parent company to subsidiary and provision by subsidiary to listed parent company, and provision to the party in Mainland China.

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Table 3

Expressed in NTD

Zenitron Corporation and Subsidiaries

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

December 31, 2020

(Except as otherwise indicated)

Securities held by	Marketable securities(Note 1)	Relationship with the securities issuer (Note 2)	General ledger account		As of Dece	mber 31,2020		Footnote (Note 4)
				Number of shares (Share/Unit)	Book value (Note 3)	Ownership (%)	Fair value
Zenitron Corporation Zenitron Corporation Zenitron Corporation Zenitron Corporation Zenitron Corporation Zenitron Corporation Zenitron Corporation Zenitron Corporation Zenitron Corporation Zenitron Corporation Zenitron Corporation Raytronic Corporation Raytronic Corporation Raytronic Corporation Yo-Teh Investment Corporation Yo-Teh Investment Corporation Supertronic International Corp	Stock Tong Yang Industry Co., Ltd. Stock Yeong Guan Group Stock TrueLight Corporation Stock Cyber Power Systems, Inc. Stock LuxNet Corporation Stock Casetek Holdings Limited Stock ADLINK TECHNOLOGY INC. Stock Orient Pharma Co., Ltd. Stock NU INC. Stock Quadlink Technology Inc. Stock MEAN WELL ENTERPRISES CO., LTD. Stock Yeong Guan Group Stock ICHIA TECHNOLOGIES, INC. Stock Orient Pharma Co., Ltd. Stock Tong Yang Industry Co., Ltd. Stock WISECHIP SEMICONDUCTOR INC. Stock Capital Investment Development Corp.	- - - - - - - - - - - - - - - - -	Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through other comprehensive income Current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Non-current financial assets at fair value through other comprehensive income	44,000 93,834 7,000 16,000 16,291 34,439 13,537,592 39,462 1,136,364 500,000 100,000 51,087 165,000 17,454 20,000 58,103 2,000,000	1,716,000 $ 7,731,922 311,850 1,420,800 439,042 3,006,525 858,283,333 572,988 8,610,838 10,000,000 27,500,000 4,209,569 3,052,500 253,432 780,000 2,385,128 49,783,496	0.01 0.08 0.01 0.02 0.01 0.01 6.22 0.02 7.89 3.62 0.07 0.05 0.05 0.01 0.00 0.13 3.57	1,716,000 $ 7,731,922 311,850 1,420,800 439,042 3,006,525 858,283,333 572,988 8,610,838 10,000,000 27,500,000 4,209,569 3,052,500 253,432 780,000 2,385,128 49,783,496

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities within the scope of IFRS 9 ‘Financial instruments’.

Note 2: Leave the column blank if the issuer of marketable securities is non-related party.

Note 3: Fill in the amount after adjusted at fair value and deducted by accumulated impairment for the marketable securities measured at fair value; fill in the acquisition cost or amortised cost deducted by accumulated impairment for the marketable securities not measured at fair value.

Note 4: The number of shares of securities and their amounts pledged as security or pledged for loans and their restrictions on use under some agreements should be stated in the footnote if the securities presented herein have such conditions.

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Table 4

Expressed in thousands of NTD (Except as otherwise indicated)

Zenitron Corporation and Subsidiaries

Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more Year ended December 31, 2020

Purchaser/seller	Counterparty	Relationship with the counterparty (Note 2)			Transaction		Differences in tra	nsaction terms compared to third party transactions (Note 1)	Notes/accoun	ts receivable(payable)	Footnote (Note 3)
			Purchases (sales)	Amount	Percentage of total purchases(sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Zenitron Coporation Zenitron (HK) Limited Zenitron Coporation Zenitron (Shanghai) International Trading Co., Ltd. Zenitron Coporation Zenitron (Shenzhen) Technology Co., Ltd. Zenitron (HK) Limited Zenitron (Shenzhen) Technology Co., Ltd. Zenitron (HK) Limited Zenitron (Shanghai) International Trading Co., Ltd. Zenitron (HK) Limited Zenitron Coporation	Zenitron (HK) Limited Zenitron Coporation Zenitron (Shanghai) International Trading Co., Ltd. Zenitron Coporation Zenitron (Shenzhen) Technology Co., Ltd. Zenitron Coporation Zenitron (Shenzhen) Technology Co., Ltd. Zenitron (HK) Limited Zenitron (Shanghai) International Trading Co., Ltd. Zenitron (HK) Limited Zenitron Coporation Zenitron (HK) Limited	1 2 1 2 1 2 3 3 3 3 2 1	Sales Purchases Sales Purchases Sales Purchases Sales Purchases Sales Purchases Sales Purchases	($ 7,259,607) 7,259,607 ( 402,271) 402,271 ( 212,346) 212,346 ( 526,494) 526,494 ( 565,070) 565,070 ( 242,132) 242,132	(36) 40 (2) 33 (1) 25 (3) 63 (3) 46 (1) 1	Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings	Selling price is based on initial cost plus necessary profit Approximately the same as the normal price Selling price is based on initial cost plus necessary profit Approximately the same as the normal price Selling price is based on initial cost plus necessary profit Approximately the same as the normal price Selling price is based on initial cost plus necessary profit Approximately the same as the normal price Selling price is based on initial cost plus necessary profit Approximately the same as the normal price Selling price is based on initial cost plus necessary profit Approximately the same as the normal price	Approximately 30~120 days after monthly billings for third parties Approximately 10~75 days after monthly billings for third parties Approximately 30~120 days after monthly billings for third parties Approximately 10~75 days after monthly billings for third parties Approximately 30~120 days after monthly billings for third parties Approximately 10~75 days after monthly billings for third parties Approximately 30~120 days after monthly billings for third parties Approximately 10~75 days after monthly billings for third parties Approximately 30~120 days after monthly billings for third parties Approximately 10~75 days after monthly billings for third parties Approximately 30~120 days after monthly billings for third parties Approximately 10~75 days after monthly billings for third parties	1,065,084 $ ( 1,065,084) 48,040 ( 48,040) 28,009 ( 28,009) 52,296 ( 52,296) 62,580 ( 62,580) 25,170 ( 25,170)	19 (39) 1 (27) 1 (31) 1 (57) 2 (35) 1 (1)

Note 1: If terms of related-party transactions are different from third-party transactions, explain the differences and reasons in the ‘Unit price’ and ‘Credit term’ columns.

Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to:

(1) Parent company to subsidiary.

(2) Subsidiary to parent company.

(3) Subsidiary to subsidiary.

Note 3: In case related-party transaction terms involve advance receipts (prepayments) transactions, explain in the footnote the reasons, contractual provisions, related amounts, and differences in types of transactions compared to third-party transactions.

Note 4: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

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Table 5

Zenitron Corporation and Subsidiaries

Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more

Year ended December 31, 2020

Expressed in thousands of NTD

(Except as otherwise indicated)

Creditor	Counterparty	Relationship with the counterparty (Note 2)	Balance as at December 31, 2020 (Note 1)	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Action taken
Accounts receivable Zenitron Coporation Other receivables Zenitron Coporation ZTHC (Shanghai) Co., Ltd.	Zenitron (HK) Limited ZTHC (Shanghai) Co., Ltd. Zenitron (Shenzhen) Technology Co., Ltd.	1 1 3	1,065,084 $ 217,600 109,371	9.56 - -	- $ - -	- - -	503,313 $ - -	- $ - -

Note 1: Fill in separately the balances of accounts receivable–related parties, notes receivable–related parties, other receivables–related parties…. Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to

(1) Parent company to subsidiary.

(2) Subsidiary to parent company.

• (3) Subsidiary to subsidiary.

Note 3: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

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Zenitron Corporation and Subsidiaries

Significant inter-company transactions during the reporting period

Table 6

Expressed in thousands of NTD

(Except as otherwise indicated)

Year ended December 31, 2020

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)			Transaction
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets (Note 3)
0 0 0 0 0 0 0 1 1 1 1 1 1 2	Zenitron Coporation Zenitron Coporation Zenitron Coporation Zenitron Coporation Zenitron Coporation Zenitron Coporation Zenitron Coporation Zenitron (HK) Limited Zenitron (HK) Limited Zenitron (HK) Limited Zenitron (HK) Limited Zenitron (HK) Limited Zenitron (HK) Limited ZTHC (Shanghai) Co., Ltd.	Zenitron (HK) Limited Zenitron (HK) Limited Zenitron (Shanghai) International Trading Co., Ltd. Zenitron (Shanghai) International Trading Co., Ltd. Zenitron (Shenzhen) Technology Co., Ltd. Zenitron (Shenzhen) Technology Co., Ltd. ZTHC (Shanghai) Co., Ltd. Zenitron Coporation Zenitron Coporation Zenitron (Shenzhen) Technology Co., Ltd. Zenitron (Shenzhen) Technology Co., Ltd. Zenitron (Shanghai) International Trading Co., Ltd. Zenitron (Shanghai) International Trading Co., Ltd. Zenitron (Shenzhen) Technology Co., Ltd.	1 1 1 1 1 1 1 2 2 3 3 3 3 3	Sales Accounts receivable Sales Accounts receivable Sales Accounts receivable Other receivables Sales Accounts receivable Sales Accounts receivable Sales Accounts receivable Other receivables	$ 7,259,607 1,065,084 402,271 48,040 212,346 28,009 217,600 242,132 25,170 526,494 52,296 565,070 62,580 109,371	Selling price has no obvious difference from the third parties 60~90 days after monthly billings Selling price has no obvious difference from the third parties 60~90 days after monthly billings Selling price has no obvious difference from the third parties 60~90 days after monthly billings In accordance with mutual agreements Selling price has no obvious difference from the third parties 60~90 days after monthly billings Selling price has no obvious difference from the third parties 60~90 days after monthly billings Selling price has no obvious difference from the third parties 60~90 days after monthly billings In accordance with mutual agreements	�� � � � � � � � � � � � � �

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

• (1) Parent company is ‘0’.

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

• Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to:

• (1) Parent company to subsidiary.

• (2) Subsidiary to parent company.

• (3) Subsidiary to subsidiary.

• Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

• Note 4: The Company may decide to disclose or not to disclose transaction details in this table based on the Materiality Principle.

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Zenitron Corporation and Subsidiaries

Table 7

Information on investees

Year ended December 31, 2020

Expressed in thousands of NTD

Investor Investee (Notes 1 and 2) Location Main business activities	Initial inves	tment amount	Shares h	eld as at December 31,2020	Net profit (loss) of the investee for the year ended December 31, 2020 (Note 2(2))	(Except as othe Investment income recognised by the Company for the year ended	rwise indicated) Footnote
	Balance as at December 31,2020	Balance as at December 31,2019	Number of shares (in thousand)	Ownership (%) Book value
Zenitron Coporation Raytronic Corporation Taiwan Trading of electronic components and assembly Zenitron Coporation Zenitron (HK) Limited Hong Kong Trading of electronic components and assembly Zenitron Coporation Supertronic International Corp. B. V. I. Reinvested holding company Zenitron Coporation Yo-Teh Investment Corporation Taiwan Reinvested holding company Supertronic International Corp. Zenitron (HK) Limited Hong Kong Trading of electronic components and assembly Supertronic International Corp. Zenicom (HK) Limited Hong Kong Trading of electronic components and assembly	$ 55,854 2,008 618,023 84,167 471,639 92,780	$ 55,854 2,008 618,023 185,000 471,639 92,780	1,520 510 18,704 7,700 34,272 23,800	100.00 $ 30,475 1.47 33,316 100.00 2,414,819 100.00 57,676 98.53 2,233,123 100.00 87,490	$ 2,321 302,614 301,241 47,832 302,614 348	$ 2,321 4,448 301,241 47,832 298,166 348	Subsidiary Second-tier subsidiary Subsidiary Subsidiary Subsidiary Subsidiary

Note 1: If a public company is equipped with an overseas holding company and takes consolidated financial report as the main financial report according to the local law rules, it can only disclose the information of the overseas holding company about the disclosure of related overseas investee information.

Note 2: If situation does not belong to Note 1, fill in the columns according to the following regulations:

• (1) The columns of ‘Investee’, ‘Location’, ‘Main business activities’, Initial investment amount’ and ‘Shares held as at December 31, 2020’ should fill orderly in the Company’s (public company’s) information on investees and

every directly or indirectly controlled investee’s investment information, and note the relationship between the Company (public company) and its investee each (ex. direct subsidiary or indirect subsidiary) in the ‘footnote’ column.

• (2) The ‘Net profit (loss) of the investee for the year ended December 31, 2020’ column should fill in amount of net profit (loss) of the investee for this period.

(3) The ‘Investment income (loss) recognised by the Company for the year ended December 31, 2020’ column should fill in the Company (public company) recognised investment income (loss) of its direct subsidiary and recognised investment income (loss) of its investee accounted for under the equity method for this period. When filling in recognised investment income (loss) of its direct subsidiary, the Company (public company) should confirm that direct subsidiary’s net profit (loss) for this period has included its investment income (loss) which shall be recognised by regulations.

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Zenitron Corporation and Subsidiaries

Information on investments in Mainland China

Year ended December 31, 2020

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Table 8
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Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in capital	Investment method (Note 1)	Accumulated amount of remittance from Taiwan to Mainland China as of January1,2020	Amount remitt to Mainland remitted back t year ended Dec	ed from Taiwan China/Amount o Taiwan for the ember 31,2020	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2020	Net income (loss) of investee for the year ended December 31, 2020	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31, 2020 (Note 2)	Book value of investments in Mainland China as of December 31, 2020	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2020	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Zenitron (Shanghai) International Trading Co., Ltd. ZTHC (Shanghai) Co., Ltd. Zenitron (Shenzhen) Technology Co., Ltd. Shanghai Zenitron Electronic Trading Co., Ltd.	Trading of electronic components and assembly Selling computer memory equipment and related components and providing technical support Trading of electronic components and assembly Trading of electronic components and assembly	$ 157,730 116,601 93,080 94,760	(2) (2) (2) (2)	$ 97,270 116,601 32,620 -	- $ - - -	- $ - - -	$ 97,270 116,601 32,620 -	$ 16,589 48,087 14,044 524	100.00 100.00 100.00 100.00	$ 16,589 48,087 14,044 524	181,056 $ 326,338 68,438 89,599	- $ - - -

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2020	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs(MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
Zenitron Corporation	246,491 $	443,484 $	2,880,935 $

Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:

(1) Directly invest in a company in Mainland China.

(2) Through investing in Zenitron (HK) Limited, an existing company in the third area, which then invested in the investee in Mainland China.

(3) Others

Note 2: Basis for investment income (loss) recognition is the financial statements that are audited and attested by R.O.C. parent company’s CPA. Note 3: The numbers in this table are expressed in New Taiwan Dollars.

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(V) Individual Statement Audited and Certified by Accountants during Recent Year

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of Zenitron Corporation

Opinion

We have audited the accompanying parent company only balance sheets of Zenitron Corporation (the “Company”) as at December 31, 2020 and 2019, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as at 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 of the parent company only financial statements as at and for the year ended December 31, 2020 in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in the Republic ���������� and in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants, Financial Supervisory Commission No. 1090360805 of February 25, 2020 and generally accepted auditing standards in the Republic of China for our audit of the parent company only financial statements as at and for the year ended December 31, 2019. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the parent company only financial statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Company’s 2020 parent company only financial statements. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Company’s 2020 parent company only financial statements are stated as follows:

Valuation of allowance for uncollectible accounts receivable

Description

Refer to Note 4(7)(8), Note 5(1) and Note 6(4) for accounting policies on accounts receivable, accounting estimates and assumptions on impairment assessment as well as details of related impairment, respectively.

The Company assesses impairment of accounts receivable based on historical experience and takes into consideration the customers’ historical default records and current financial conditions to estimate expected loss rate in recognising loss allowance. In addition, the Company provides for full allowance for uncollectible accounts from individual customers where there is an indication that they are individually identified as impaired or a credit impairment actually occurred. As the assessment of allowance for uncollectible accounts is subject to management’s judgment and estimates in determining the future collectability, such as management’s assessment of customer’s credit risk, we considered the valuation of allowance for uncollectible accounts receivable from individual customers a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

1. Understood and evaluated related policies and internal control of the credit risk management and accounts receivable impairment.

2. Assessed the calculation logic of year-end accounts receivable ageing report provided by management, reviewed the related supporting documents and verified it against the accounting records to ascertain the accuracy of the ageing classification.

3. For those material accounts receivable individually identified by the management to have been impaired, reviewed the supporting documents of impairment assessment provided by the management to assess the reasonableness of collectability.

4. Sampled significant overdue accounts receivable amounts and examined their subsequent collections.

~177~

Assessment of allowance for inventory valuation losses

Description

Refer to Note 4(11), Note 5(2) and Note 6(5) for accounting policies on inventory valuation, accounting estimates and assumptions and details of allowance for valuation losses, respectively.

The Company is mainly engaged in sales of electronic components. The Company measures ending inventories at the lower of cost and net realisable value and provides allowance for inventory valuation losses based on usable condition of inventories that were individually identified as obsolete. As the life cycle of such inventories is short, the market is competitive, and the assessment of allowance for valuation of inventories individually identified as obsolete often involves management’s subjective judgment, we considered the estimation of inventory valuation loss a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

1. Understood and evaluated the internal control procedures over the Company’s inventories individually identified as obsolete.

2. Understood the Company’s warehousing control procedures, reviewed the annual physical inventory count plan as well as participated and observed the annual physical inventory count in order to assess the effectiveness of the procedures the management used to identify and control obsolete inventories.

3. Obtained the details of inventories that were individually identified as obsolete by the management, reviewed the related supporting documents and verified it against the accounting records.

Appropriateness of warehouse revenue cut-off

Description

Refer to Note 4(22) for accounting policies on revenue recognition.

The Company has two revenue types, including direct shipment from its own warehouses and shipment from distribution warehouses. For shipment from distribution warehouses, revenue is recognised when goods are picked up by customers. The Company’s responsible unit regularly obtains the inventory movement records generated from the inventory warehousing system of the customer’s distribution warehouses. The supporting documents for revenue recognition include inventory movement records. As the distribution warehouses are located separately in various regions in China, the process of revenue recognition involves numerous manual procedures. Considering the appropriateness of the timing of distribution warehouses’ sales revenue recognition, we considered the recognition of distribution warehouses sales revenue a key audit matter.

~178~

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

1. Understood the procedures of revenue recognition for shipment from distribution warehouses, evaluated and sampled the internal control of the two parties’ daily reconciliation.

2. Obtained the inventory movement records generated from the inventory warehousing system of the customer’s distribution warehouses in a certain period before and after the balance sheet date and checked whether the timing of revenue recognition was reasonable.

3. Observed the physical inventory count or sent out confirmation letters to the distribution warehouses with significant inventory amount.

Responsibilities of management and those charged with governance for the parent company only financial statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only 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, are responsible for overseeing the Company’s financial reporting process.

Auditors’ responsibilities for the audit of the parent company only financial statements

Our objectives are to obtain reasonable assurance about whether the parent company only 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 generally accepted auditing standards 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 parent company only financial statements.

~179~

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

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

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

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

4. 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 parent company only 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.

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

6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the 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.

~180~

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 parent company only financial statements of the current year 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.

Chen, Chin-Chang Yi-Fan Lin For and on behalf of PricewaterhouseCoopers, Taiwan March 22, 2021

---

The accompanying parent company only financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying parent company only financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

~181~

ZENITRON CORPORATION

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

Assets	December31,2020 December31,2019 Notes AMOUNT % AMOUNT % 6(1) !"#$%&& ' '"!$&(# ' 6(2) )'$"#" (#$)&" 6(3) %!%$%!" " ""+$'() " 6(4) ))$++, &$()( 6(4) '$(!+$'") (, ($"''$'"% (( 7 )$)')$)(( % '&&$#(, ! &%$,"& ) +($(!+ ) 7 ##'$)&' # ##,$'(! # 6(5) '$#&+$#(+ #& #$(&#$&"( ## +#$''& &"$(!% ) ))$"(%$"&' %, %$),)$"%( +' 6(3) '"$))) '"$))) 6(6) #$!("$#%" )+ #$(!+$(+, #, 6(7) (+"$#)# ( (%#$+)) ' 6(8) +"' &&! 6(10) and 8 (+$,(" (+$!+& 6(22) !,$'#' (!$!'( 8 '%$''# '%$%## # ($,&!$#+! #, #$&,&$)() #" )'$+(($&"& ),, ))$,),$%)' ),, (Continued)	December31,2019	December31,2019
			%
Current assets Cash and cash equivalents Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - current Notes receivable, net Accounts receivable, net Accounts receivable - related parties, net Other receivables Other receivables - related parties Inventories, net Other current assets Total current assets Non-current assets Financial assets at fair value through other comprehensive income - non-current Investments accounted for using equity method Property, plant and equipment Right-of-use assets Investment property, net Deferred income tax assets Other non-current assets Total non-current assets Total assets			' " (( ! ) # ## )
			+'
			#, ' #
			#"
			),,

~182~

ZENITRON CORPORATION

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

Liabilities and Equity	Notes 6(11) 6(12) 7 6(8) 6(22) 6(8) 6(13) 6(14) 6(15) 6(16) 9 6(16) and 11	December31,2020 December31,2019 AMOUNT % AMOUNT % !"#$%"#&' (# #"'('"($( #! )('")! ( (''"($% ) +"('! , #"!!( , +")!"!(( %& %"&!"'() %! (("!'( , %("&+) , +)"('' + %!+"($) % , , +)"%+# , (! , $&% , %%"'&# , $"%)+ , '"&(&")'& !! !"(+("'# )$ %%("(!$ % %%("(!$ % #)( , %+# , !'"''+ , !)")$) % %$("$%( % %$"%&! + '"'#+"(%% !& !"!)"%! ! +"%#$"+(' %) +"%#$"+(' %' ')$"&#( & '!)"#( ' &%$"+ ) !')"%)( ! !(#"!!+ ( #'"!& ( #(+"&%# + +%&"+( + ("$%"))$ ## ("()"&$ ( %("&##"'!' % %%"%"$%( %	December31,2019	December31,2019
		AMOUNT !"#$%"#&' )('")! +"('! +")!"!(( (("!'( +)"('' , (! %%"'&# '"&(&")'& %%("(!$ #)( !'"''+ %$("$%( '"'#+"(%% +"%#$"+(' ')$"&#( &%$"+* !(#"!!+ #(+"&%# ("$%"))$ %("&##"'!'		%
Current liabilities Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Accounts payable - related parties Other payables Current income tax liabilities Current lease liabilities Other current liabilities Total current liabilities Non-current liabilities Deferred income tax liabilities Non-current lease liabilities Other non-current liabilities Total non-current liabilities Total liabilities Equity Share capital Common stock Capital surplus Capital surplus Retained earnings Legal reserve Unappropriated retained earnings Other equity interest Other equity interest Total equity Significant contingent liabilities and unrecognised contract commitments Siginificant subsequent events Total liabilities and equity				#! ) , %! , % , , ,
				)$
				% , %
				+
				!*
				%' ' ! ( +
				(*
				%**

The accompanying notes are an integral part of these parent company only financial statements.

~183~

ZENITRON CORPORATION

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars, except for earnings per share)

Items

Year ended December 31 2020 2019 Notes AMOUNT % AMOUNT % 6(17) and 7 ! "#$%"&$"#' %## ! %'$()$&+% %## 6(5) and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

Operating Revenue Operating Costs Gross Profit Unrealised gain from sales Realised gain from sales Net Gross Profit Operating Expenses Selling expenses General and administrative expenses Total operating expenses Operating Profit Non-operating Income and Expenses Interest income Other income Other gains and losses Finance costs Share of profit of subsidiaries and joint ventures accounted for using equity method Total non-operating income and expenses Profit before Income Tax Income tax expense Profit for the Year Other Comprehensive Income Components of other comprehensive income (loss) that will not be reclassified to profit or loss Loss on remeasurements of defined benefit plan Unrealised gains from investments in equity instruments measured at fair value through other comprehensive income Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income (loss) that will be reclassified to profit or loss Exchange differences on translation of foreign financial statements Other Comprehensive Income for the Year Total Comprehensive Income Earnings per Share (in dollars) Basic earnings per share Diluted earnings per share

The accompanying notes are an integral part of these parent company only financial statements.

~184~

ZENITRON CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

Notes Year ended December 31, 2019 Balance at January 1, 2019 Net income for the year Other comprehensive income (loss) Total comprehensive income (loss) Appropriations and distribution of 2018 earnings 6(16) Legal reserve Cash dividends Balance at December 31, 2019 Year ended December 31, 2020 Balance at January 1, 2020 Net income for the year Other comprehensive income (loss) Total comprehensive income (loss) Appropriations and distribution of 2019 earnings 6(16) Legal reserve Cash dividends Cash payment from capital surplus 6(16) Disposal of investments in equity instruments designated at fair value through other comprehensive income 6(3) Balance at December 31, 2020	Notes		Share capital – common stock		Capital surplus		Retained	Earnings	Other Equity Interest	Other Equity Interest		Total equity
							Legal reserve	Unappropriated retained earnings	Exchange differences on translation of foreign financial statements	Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income
			!"#$%&#"'( / / / / / !"#$%&#"'( !"#$%&#"'( / / / / / / / !"#$%&#"'(	! ()#+%' / / / / / ! ()#+%' ! ()#+%' / / / / / - )#%++. / ! (&#,%'			! )'#'(+ / / / '+#))' / ! )(#$' ! )(#$*' / / / "%#+') / / / ! ,$&#"++	! )%#,), "%+#&$ - $$,. "%+#')' - '+#))'. - %)%#++. ! %(+#+), ! %(+#+), ',"#+" - '#'((. '),#") - "%#+'). - "+,#)++. / $)#,$ ! )'%#))"	- ! %&#($(. / - $#,". - $#,". / / - ! (+#),$. - ! (+#),$. / - ,#+"+. - ,#+"+. / / / / -! $)*#)($.	! &%#,%$ / ""'#$'' ""'#$'' / / ! %+,#&, ! %+,#&, / "$,#"'' "$,#"'' / / / - $)#,$. ! +&#'+'	!'#%))#%" "%+#&$ $,"#", '+"#&) / - %)%#++. !'#'+#,+& !'#'+#,+& ',"#+" $%,#," )+(#,+ / - "+,#)++. - )#%++. / !'#&+$#**&

The accompanying notes are an integral part of these parent company only financial statements.

~185~

ZENITRON CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Unrealised gain from sales Realised gain from sales Net gain on financial assets at fair value through profit or loss Expected credit loss (gain) Share of profit of subsidiaries and joint ventures accounted for using equity method Depreciation and amortisation (Gain) loss on disposal of property, plant and equipment Interest expense Interest income Dividend income Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss Notes and accounts receivable Accounts receivable - related parties Other receivables (including related parties) Inventories Increase in other current assets Changes in operating liabilities Notes and accounts payable (including related parties) Other payables Other current liabilities Other non-current liabilities Cash (outflow) inflow generated from operations Interest received Interest paid Income tax paid Net cash flows (used in) from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Proceeds from capital reduction of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment (Increase) decrease in refundable deposits (Increase) decrease in other receivables - related parties Increase in other current assets Dividends received Net cash flows from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in short-term loans Increase (decrease) in short-term notes and bills payable Payments of lease liabilities Cash dividends paid Net cash flows from (used in) financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Year ended December 31 Notes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

The accompanying notes are an integral part of these parent company only financial statements.

~186~

ZENITRON CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY AND ORGANISATION

Zenitron Corporation (the “Company”) was incorporated as a company limited by shares in October 1982. The Company has been listed on the Taiwan Stock Exchange and started trading since August 26, 2002. The Company is primarily engaged in the sales of electrical components.

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION

These parent company only financial statements were authorised for issuance by the Board of Directors on March 22, 2021.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

• (1) Effect of the adoption of new issuances of or amendments to International Financial Reporting

Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by the FSC effective from 2020 are as follows:

follows:
New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Amendments to IAS 1 and IAS 8, ‘Disclosure initiative-definition of material’ Amendments to IFRS 3, ‘Definition of a business’ Amendments to IFRS 9, IAS 39 and IFRS 7, ‘Interest rate benchmark reform’ Amendment to IFRS 16, ‘Covid-19-related rent concessions’ Note: Earlier application from January 1, 2020 is allowed by the FSC.	January 1, 2020 January 1, 2020 January 1, 2020 June 1, 2020 (Note)

Except for the following, the above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment. Amendment to IFRS 16, ‘Covid-19-related rent concessions’

This amendment provides a practical expedient for lessees from assessing whether a rent concession related to COVID-19, and that meets all the following conditions, is a lease modification:

• A. Changes in lease payments result in the revised consideration for the lease that is substantially the

• ����������������������������������������������������������������������������������������

• B. Any reduction in lease payments affects only payments origin������������������������������������� and

C. There is no substantive change to other terms and conditions of the lease.

Any lease payment changes caused by the rent concessions will be accounted for as variable lease payments during the concession period.

~187~

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by

the Company

New standards, interpretations and amendments endorsed by the FSC effective from 2021 are as follows:

New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 4, ‘Extension of the temporary exemption from applying IFRS 9’ Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘Interest Rate Benchmark Reform - Phase 2’	January 1, 2021 January 1, 2021

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

endorsed by the FSC are as follows:
New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 3, ‘Reference to the conceptual framework’ Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ IFRS 17, ‘Insurance contracts’ Amendments to IFRS 17, 'Insurance contracts' Amendments to IAS 1, ‘Classification of liabilities as current or non-current’ Amendments to IAS 1, ‘Disclosure of accounting policies’ Amendments to IAS 8, ‘Definition of accounting estimates’ Amendments to IAS 16, ‘Property, plant and equipment: proceeds before intended use’ Amendments to IAS 37, ‘Onerous contracts — cost of fulfilling a contract’ Annual improvements to IFRS Standards 2018–2020	January 1, 2022 To be determined by International Accounting Standards Board January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2022 January 1, 2022 January 1, 2022

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these parent company financial statements

are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

~188~

(1) Compliance statement

The parent company only financial statements of the Company have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(2) Basis of preparation

• A. Except for the following items, the parent company only financial statements have been prepared under the historical cost convention:

• (a) Financial assets at fair value through profit or loss.

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

• (c) Defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation.

• B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Foreign currency translation

The parent company only financial statements are presented in New Taiwan Dollars, which is the presentation currency of the primary economic environment in which the Company operates (the “functional currency”).

• A. Foreign currency transactions and balances

• (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.

• (b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.

• (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet ����������������������������������������������������� profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-����������������������������������������������������������������������������� translation differences are recognised in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

~189~

  - (d) All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.

• B. Translation of foreign operations

  • The operating results and financial position of all the group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

  • (a) Assets and liabilities for each balance sheet presented are translated at the closing exchange ���������������������������������������

  • (b) Income and expenses for each statement of comprehensive income are translated at average ����������������������������������

  • (c) All resulting exchange differences are recognised in other comprehensive income.

• (4) Classification of current and non-current items

• A. Asse������������������������������������������������������������������������������������������������ classified as non-current assets:

  • (a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within t��������������������������

  • (b) ���������������������������������������

  • (c) ����������������������������������������������������������������������������������������

  • (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

• B. !��������������������������������������������������������������������������������������������������������� are classified as non-current liabilities:

  • (a) !�����������������������������������������������������������������������������

  • (b) !��������������������������������������������������

  • (c) !�����������������������������������������������������������������������������������

  • (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(5) Financial assets at fair value through profit or loss

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Company measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Company subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.

• D. The Company recognises the dividend income when the right to receive payment is established,

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future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

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

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Company has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. The Company subsequently measures the financial assets at fair value: The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

• (7) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Company a legal right to receive consideration in exchange for transferred goods.

• B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(8) Impairment of financial assets

• For accounts receivable or contract assets that have a significant financing component, at each reporting date, the Company recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Company recognises the impairment provision for lifetime ECLs.

(9) Derecognition of financial assets

The Company derecognises a financial asset when one of the following conditions is met:

• A. The contractual rights to receive the cash flows from the financial asset expire.

• B. The contractual rights to receive cash flows of the financial asset have been transferred and the Company has transferred substantially all risks and rewards of ownership of the financial asset.

• C. The contractual rights to receive ������������������������������������������������������������������ the Company has not retained control of the financial asset.

� (10) Leasing arrangements (lessor) lease receivables/ operating leases

Lease income from an operating lease (net of any incentives given to the lessee) is recognised in

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profit or loss on a straight-line basis over the lease term.

(11) Inventories

• Inventories are stated at the lower of cost and net realisable value. Cost is determined using the moving average method. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the applicable variable selling expenses.

(12) Investments accounted for using equity method / subsidiaries

• A. Subsidiaries are all entities (including structured entities) controlled by the Company. The Company controls an entity when the Company is exposed, 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.

• B. Inter-company transactions, balances and unrealised gains or losses on transactions between companies within the Company are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

• C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company continues to recognise losses proportionate to its ownership.

• D. Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity.

• E. Pursuant to the Regulations Governing the Preparation of Financial Reports by Securities Issuers, profit (loss) of the current period and other comprehensive income in the parent company only financial statements shall equal to the amount attributable to owners of the parent in the financial statements prepared with basis for consolidation. Owners’ equity in the parent company only financial statements shall equal to equity attributable to owners of the parent in the financial statements prepared with basis for consolidation.

(13) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.

• B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

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• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

• D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change.

The estimated useful lives of property, plant and equipment are as follows:

Buildings and structures 1 ~ 55 year(s) Transportation equipment 1 ~ 5 year(s) Office equipment 1 ~ 5 year(s)

(14) Leasing arrangements (lessee) - right-of-use assets/ lease liabilities

• A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Company. For short-term leases or leases of low-value assets, lease payments are recognised as an expense on a straight-line basis over the lease term.

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of fixed payments, less any lease incentives receivable.

• The Company subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost comprising the following:

• (a) "��������������������������������������������������������

• (b) ����������������������������������������������������������

• (c) ���������������������������������������������������

• (d) An estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.

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(15) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 50 ~ 55 years.

(16) Impairment of non-financial assets

The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognising impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

(17) Borrowings

Borrowings comprise short-term bank borrowings and other short-term loans.

• (18) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods and notes payable are those resulting from operating and non-operating activities.

• B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(19) Derecognition of financial liabilities

A financial liability is derecognised when the obligation specified in the contract is either discharged or cancelled or expires.

(20) Employee benefits

• A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expense in that period when the employees render service.

• B. Pensions

• (a) Defined contribution plan

For defined contribution plan, the contributions are recognised as pension expense when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

• (b) Defined benefit plan

• i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Company in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plan is the present value of the defined benefit obligation

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at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date).

     - ii. Remeasurements arising on the defined benefit plan are recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.

     - iii. Past service costs are recognised immediately in profit or loss.

• C. Employees’ compensation and directors’ remuneration

  • Employees’ compensation and directors’ remuneration are recognised as expense and liability, provided that recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the accrued amounts and the subsequently actual distributed amounts resolved by the shareholders is accounted for as changes in estimates.

• (21) Income tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

• C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

• D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.

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(22) Revenue recognition

Sales of goods - agency

• A. The Company is an agency of electronic components. Sales are recognised 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 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, or the Company has objective evidence that all criteria for acceptance have been satisfied.

• B. A receivable is recognised when the goods are delivered as this is the timing based on trade terms that the consideration is unconditional because only the passage of time is required before the payment is due.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

The preparation of these parent company only financial statements requires management to make critical judgements in applying the Company’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets ����������������������������������������������������������������������������������������������#

• (1) Valuation of allowance for uncollectible accounts receivable

• The assessment of accounts receivable impairment relies on the Company’s judgement and assumption about the recoverable amount of the accounts receivable in the future, taking into account various factors such as client’s financial status, the Company’s internal credit rating, transaction history, current economic condition and others which might affect the client’s repayment ability. Where there is suspicion of recoverability, the Company needs to assess the possible recoverable amount and recognise reasonable allowance. The assessment of impairment depends on reasonable expectation about future events on the basis of the conditions existing at the balance sheet date. The estimation may differ from the actual result and may lead to significant changes.

• (2) Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Company must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Company evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation.

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6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash and cash equivalents
Cash on hand and revolving funds Checking accounts and demand deposits	December 31,2020 192 $ 562,707 562,899 $	December 31,2019
		192 $ 465,740
		465,932 $

• A. The Company transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

• B. The Company has no cash pledged to others.

• (2) Financial assets at fair value through profit or loss

		December	31,2020		December	31,2019
Current items
Financial assets mandatorily measured at fair
value through profit or loss
Listed stocks		$	22,951		$	60,942
Valuation adjustments	(		8,325)	(		28,746)
		$	14,626		$	32,196

• A. The Company recognised net profit amounting to $2,568 and $10,696 on financial assets at fair value through profit or loss for the years ended December 31, 2020 and 2019, respectively.

• B. The Company has no financial assets at fair value through profit or loss pledged to others as collateral.

• C. Information relating to financial assets at fair value through profit or loss is provided in Note 12(3).

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

Current items Equity instruments Listed stocks Emerging stocks Valuation adjustment Non-current items Equity instruments Unlisted stocks	December31,2020 347,990 $ 2,462 350,452 508,404 858,856 $ 46,111 $	December31,2019
		357,168 $ 2,388
		359,556 307,875
		667,431 $
		46,111 $

• A. The Company has elected to classify stock investments with steady dividend income as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $904,967 and $713,542 for the years ended December 31, 2020 and 2019, respectively. Without considering any collateral held or other credit enhancements, until the end of the reporting period, the maximum credit risk in relation to the financial loss arising from

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unsatisfied performance obligation of the counterparties is the carrying amount of financial assets.

• B. Aiming to adjust strategic investment, the Company sold $25,892 stock investment at fair value resulting in cumulative gain on disposal of $16,715 during the year ended December 31, 2020.

• C. Amounts recognised in other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

		YearendedDecember31	YearendedDecember31	YearendedDecember31
		2020		2019
Equity instruments at fair value through other
comprehensive income
Fair value change recognised in other
comprehensive income	$	217,244	$	224,144
Cumulative gains reclassified to retained
earnings due to derecognition	($	16,715)	$	-

• D. The Company has no financial assets at fair value through other comprehensive income pledged to others as collateral.

• E. Information relating to fair value of financial assets at fair value through other comprehensive income is provided in Note 12(3).

(4) Notes and accounts receivable

Notes and accounts receivable
		December	31,2020		December	31,2019
Notes receivable		$	11,770		$	9,313
Accounts receivable		$	4,428,017		$	3,709,350
Less: Allowance for uncollectible accounts	(		70,556)	(		64,882)
		$	4,357,461		$	3,644,468

• A. The Company uses historical experience and takes into consideration the customers’ historical default records, current financial conditions and economic conditions of the industry to estimate expected loss rate in recognising loss allowance. In addition, the Company provides for adequate allowance for uncollectible accounts from individual customers where there is an indication that they are impaired based on specific identification or a credit impairment actually occurred and the customers did not provide any collateral.

• B. The ageing analysis of accounts and notes receivable is as follows:

Not past due Up to 30 days 31 to 90 days Over 90 days	December	Notes receivable 11,770 $ - - - 11,770 $ 31,2020	December	31,2020
	Accounts receivable 4,293,105 $ 4,294 78,043 52,575 4,428,017 $		Accounts receivable 3,607,334 $ 4,880 46,719 50,417 3,709,350 $	Notes receivable
				9,313 $ - - -
				9,313 $

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The above ageing analysis was based on past due date.

• C. The Company applies the simplified approach using the provision matrix based on the loss rate methodology to estimate expected credit loss.

• D. The Company adjusts historical and timely information to assess the default possibility of accounts receivable, contract assets and lease payments receivable. On December 31, 2020 and 2019, the provision matrix based on the roll rate methodology is as follows:

December 31, 2020 Expected loss rate Total accounts receivable December 31, 2019 Expected loss rate Total accounts receivable	0.11% 4,293,105 $ 0.3% 3,607,334 $ Notpast due Notpast due	Up to 30 dayspast due 0.11%-0.13% 4,294 $ Up to 30 dayspast due 0.3% 4,880 $	31~90 dayspast due 0.11%-100% 78,043 $ 31~90 dayspast due 0.3% 46,719 $	Over 90 dayspast due 0.11%-100% 52,575 $ Over 90 dayspast due 53.6%-100% 50,417 $	Total
					4,428,017 $
					Total
					3,709,350 $

• E. Movements in relation to the Company applying the simplified approach to provide loss allowance for accounts receivable are as follows:

At January 1 Provision for (reversal of) impairment loss Write-offs At December 31	2020 2019 Accounts receivable Accounts receivable 64,882 $ 66,976 $ 5,674 2,095) ( - 1 70,556 $ 64,882 $

• F. As of December 31, 2020, December 31, 2019 and January 1, 2019, the balances of receivables (including notes receivable) from contracts with customers amounted to $4,439,787, $3,718,663 and $4,061,424, respectively. Without considering any collateral held or other credit enhancements, until the end of the reporting period, the maximum credit risk in relation to the financial loss arising from unsatisfied performance obligation of the counterparties is the carrying amount of financial assets.

• G. Information relating to credit risk of accounts receivable and notes receivable is provided in Note 12(2).

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(5) Inventories

Inventories
Merchandise inventories Inventories in transit Merchandise inventories Inventories in transit		December31,2020
	4,175,374 $ 346,610 4,521,984 $ Cost	224,747) ($ - 224,747) ($ Allowance for valuation loss December31,2019	Bookvalue
			3,950,627 $ 346,610
			4,297,237 $
	2,534,104 $ 62,342 2,596,446 $ Cost	203,483) ($ - 203,483) ($ Allowance for valuation loss	Bookvalue
			2,330,621 $ 62,342
			2,392,963 $

The cost of inventories recognised as expense for the year:

Investments accounted for using equity method A. Subsidiaries accounted for using equity method Cost of goods sold Loss on decline in market value Supertronic International Corp. Zenitron (HK) Limited Yo-Teh Investment Corporation Raytronic Corporation	Year ended December 31	Year ended December 31
	2020 19,416,759 $ 62,966 19,479,725 $ December31,2020 2,414,819 $ 33,316 57,676 30,475 2,536,286 $	2019 14,700,112 $ 76,968 14,777,080 $ December31,2019
		2,187,631 $ 29,836 111,749 28,154
		2,357,370 $

(6) Investments accounted for using equity method

A. Subsidiaries accounted for using equity method

• B. Share of profit of subsidiaries accounted for using equity method

Supertronic International Corp. Zenitron (HK) Limited Yo-Teh Investment Corporation Raytronic Corporation	Year ended December 31	Year ended December 31
	2020 301,241 $ 4,448 47,832 2,321 355,842 $	2019
		84,699 $ 1,294 1,192 2,724
		89,909 $

Refer to Note 4(3) the consolidated financial statements for the year ended December 31, 2020 for the information regarding the Company’s subsidiaries.

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(7) Property, plant and equipment

Property, plant and equipment
At January 1, 2020 Cost Accumulated depreciation 2020 Opening net book amount as at January 1 Additions Disposals Depreciation charge Closing net book amount as at December 31 At December 31, 2020 Cost Accumulated depreciation At January 1, 2019 Cost Accumulated depreciation 2019 Opening net book amount as at January 1 Additions Disposals Depreciation charge Closing net book amount as at December 31 At December 31, 2019 Cost Accumulated depreciation		Land	Buildings and structures	Transportation equipment	Office equipment	Total
		252,592 $ - 252,592 $ 252,592 $ - - - 252,592 $ 252,592 $ - 252,592 $ Land	334,227 $ 230,928) ( 103,299 $ 103,299 $ - - 4,779) ( 98,520 $ 334,227 $ 235,707) ( 98,520 $ Buildings and structures	43,704 $ 29,306) ( 14,398 $ 14,398 $ 5,740 126) ( 4,253) ( 15,759 $ 43,864 $ 28,105) ( 15,759 $ Transportation equipment	60,445 $ 48,023) ( 12,422 $ 12,422 $ 640 - 3,721) ( 9,341 $ 61,002 $ 51,661) ( 9,341 $ Office equipment	690,968 $ 308,257) ( 382,711 $ 382,711 $ 6,380 126) ( 12,753) ( 376,212 $ 691,685 $ 315,473) ( 376,212 $ Total
		252,592 $ - 252,592 $ 252,592 $ - - - 252,592 $ 252,592 $ - 252,592 $	334,227 $ 225,862) ( 108,365 $ 108,365 $ - - 5,066) ( 103,299 $ 334,227 $ 230,928) ( 103,299 $	46,284 $ 32,165) ( 14,119 $ 14,119 $ 5,500 924) ( 4,297) ( 14,398 $ 43,704 $ 29,306) ( 14,398 $	67,135 $ 55,642) ( 11,493 $ 11,493 $ 4,760 23) ( 3,808) ( 12,422 $ 60,445 $ 48,023) ( 12,422 $	700,238 $ 313,669) ( 386,569 $ 386,569 $ 10,260 947) ( 13,171) ( 382,711 $ 690,968 $ 308,257) ( 382,711 $

The significant components of buildings and structures include main building and auxiliary building, which are depreciated over 55 and 15 years, respectively.

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(8) Lease arrangements – lessee

Right-of-use assets: Buildings and structures Lease liabilities: Current Non-current	December31,2020 Carrying amount 764 $ 406 $ 354 760 $	December31,2019
		Carrying amount
		995 $
		871 $ 123
		994 $

• A. The Company leases various assets including buildings. Rental contracts are typically made for periods of 1 to 3 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

• B. Short-term leases with a lease term of 12 months or less comprise transportation equipment, buildings and structures. Low-value assets comprise office equipment. Right-of-use asset and lease liabilities were not recognised for these leases.

• C. The depreciation charges on right-of-use assets are as follows:

The depreciation charges on right-of-use assets are	as follows:	as follows:
Buildings and structures	YearendedDecember31
	2020 Depreciationcharge 1,086 $	2019
		Depreciationcharge
		1,142 $

• D. For the years ended December 31, 2020 and 2019, the additions to right-of-use assets were $854 and $0, respectively.

• E. Except for the depreciation charge, the information on profit or loss in relation to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term leases and leases of low-value assets	2020 2019 15 $ 19 $ 489 471 YearendedDecember31	2020 2019 15 $ 19 $ 489 471 YearendedDecember31
		2019 19 $ 471

• F. For the years ended December 31, 2020 and 2019, the Group’s total cash outflow for leases were $1,592 and $1,634, respectively.

� (9) Lease arrangements lessor

For the years ended December 31, 2020 and 2019, the Company recognised rent income in the amounts of $6,897 and $6,907, respectively, based on the operating lease agreement, which does not include variable lease payments.

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(10) Investment property

January 1, 2020 Cost Accumulated depreciation and impairment 2020 Opening net book amount as at January 1 Depreciation charge Closing net book amount as at December 31 December 31, 2020 Cost Accumulated depreciation and impairment January 1, 2019 Cost Accumulated depreciation and impairment 2019 Opening net book amount as at January 1 Depreciation charge Closing net book amount as at December 31 December 31, 2019 Cost Accumulated depreciation and impairment

Land Buildings Total $ 32,466 $ 29,941 $ 62,407 ( 15,410) (9,418) ( 24,828) 17,056 $ 20,523 $ 37,579 $ $ 17,056 $ 20,523 $ 37,579 - (543) (543) $17,056 $19,980 $ 37,036 $ 32,466 $ 29,941 $ 62,407 ( 15,410) (9,961) ( 25,371) 17,056 $ 19,980 $ 37,036 $ Land Buildings Total $ 32,466 $ 29,941 $ 62,407 ( 15,410) (8,874) ( 24,284) 17,056 $ 21,067 $ 38,123 $ $ 17,056 $ 21,067 $ 38,123 - (544) (544) $17,056 $20,523 $ 37,579 $ 32,466 $ 29,941 $ 62,407 ( 15,410) (9,418) ( 24,828) 17,056 $ 20,523 $ 37,579 $

A. Rental income from investment property and direct operating expenses arising from investment property are shown below:

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Rental revenue from investment property Direct operating expenses arising from the investment property that generated rental income during the year	YearendedDecember31	YearendedDecember31
	2020 2,546 $ 543 $	2019
		2,546 $
		544 $

• B. The fair value of the investment property held by the Company was $95,101 and $91,476 as of December 31, 2020 and 2019, respectively, which were based on the trading prices of nearby areas.

• C. Refer to Note 8 for further information on investment property pledged to others as collateral.

(11) Short-term borrowings

Short-term borrowings
Unsecured borrowings Interest rate range	December31,2020 6,381,379 $ 0.64%~1.21%	December31,2019
		3,949,484 $
		1%~3%

• A. For the years ended December 31, 2020 and 2019, the interest expense recognised in profit or loss amounted to $64,592 and $105,580, respectively.

• B. As of December 31, 2020 and 2019, the Company provided collaterals for the financing facility of short-term borrowings and issued guaranteed notes as collateral in the amount of $11,309,510 and $11,516,175, respectively.

(12) Short-term notes and bills payable

Short-term notes and bills payable
			December31,2020		December31,2019
Short-term notes and bills payable		$	550,000		$	500,000
Discount on short-term notes and bills payable	(		494)	(		519)
		$	549,506		$	499,481
Coupon rate			1%~1.2%			1%~1.2%

The abovementioned commercial paper was secured by financial institutions.

(13) Pensions

• A. (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Act, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee.

• (b) The amounts recognised in the balance sheet are as follows:

~204~

		December	31,2020		December	31,2019
Present value of defined benefit obligations		$	84,217		$	80,044
Fair value of plan assets	(		18,965)	(		19,246)
Net defined benefit liability		$	65,252		$	60,798

(c) Movements in net defined benefit liabilities are as follows:

		Present value of	Present value of
		defined benefit				Fair value of			Net defined
			obligations			planassets		benefitliability
2020
Balance at January 1	($		80,044)		$	19,246	($		60,798)
Current service cost			1,444			-			1,444
Interest (expense) income	(		592)			137	(		455)
	(		79,192)			19,383	(		59,809)
Remeasurements:
Return on plan assets			-			632			632
Change in demographic
assumptions	(		465)			-	(		465)
Change in financial assumptions	(		3,702)			-	(		3,702)
Experience adjustments	(		2,088)			-	(		2,088)
	(		6,255)			632	(		5,623)
Paid pension			1,230	(		1,230)			-
Pension fund contribution			-			180			180
Balance at December 31	($		84,217)		$	18,965	($		65,252)
		Present value of
		defined benefit				Fair value of			Net defined
			obligations			planassets		benefitliability
2019
Balance at January 1	($		78,464)		$	18,234	($		60,230)
Interest (expense) income	(		775)			174	(		601)
	(		79,239)			18,408	(		60,831)
Remeasurements:
Return on plan assets			-			658			658
Change in demographic
assumptions			9			-			9
Change in financial assumptions	(		2,017)			-	(		2,017)
Experience adjustments			1,203			-			1,203
	(		805)			658	(		147)
Pension fund contribution			-			180			180
Balance at December 31	($		80,044)		$	19,246	($		60,798)

~205~

• (d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-thecounter, or private placement equity securities, investment in domestic or foreign real estate securitisation products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2020 and 2019 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

• (f) The principal actuarial assumptions used were as follows:

The principal actuarial assumptions used were	as follows:	as follows:
Discount rate Future salary increases	YearendedDecember31
	2020 0.30% 2.00%	2019
		0.75%
		2.00%

Assumptions regarding future mortality experience are set based on actuarial advice in accordance with statistics and experience of the 5th Taiwan Standard Ordinary Experience Mortality Table.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

Increase 0.25% Decrease 0.25% December 31, 2020 Effect on present value of defined benefit obligation 2,061) ($ 2,139 $ December 31, 2019 Effect on present value of defined benefit obligation 2,016) ($ 2,095 $ Discount rate	Future salaryincreases	Future salaryincreases
	Increase 0.25% Decrease 0.25% 2,097 $ 2,032) ($ 2,064 $ 1,997) ($	Decrease 0.25%

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

~206~

• (f) Expected contributions to the defined benefit pension plan of the Company for the year ending December 31, 2021 amount to $180.

• (g) As of December 31, 2020, the weighted average duration of the retirement plan is 9 years. The analysis of timing of the future pension payment was as follows:

The analysis of timing of the future pension payment was as follows:
Within 1 year 1-2 year(s) 2-5 years Over 5 years	2,421 $ 3,767 20,562 59,483
	86,233 $

• B. (a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount not lower than 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

  • (b) The pension costs under the defined contribution pension plan of the Company for the years ended December 31, 2020 and 2019 were $14,710 and $14,540, respectively.

• (14) Share capital

• A. As of December 31, 2020, the Company’s authorised capital was $3,500,000, consisting of 350 million shares of ordinary stock (including 20 million shares reserved for employee stock options), and the paid-in capital was $2,138,249 with a par value of $10 (in dollars) per share.

• B. As of December 31, 2020 and 2019, the beginning and ending number of outstanding shares were both 213,825 thousand shares.

(15) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paidin capital each year. However, capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

(16) Retained earnings / events after the balance sheet date

• A. In accordance with the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve, and setting aside or reversal of special reserve in accordance with related laws, if any. The remaining earnings are the distributable earnings for the year.

~207~

• B. Dividend policy:

• (a) The distribution of dividends shall be above 50% of the current year’s distributable earnings and the cash dividends distributed shall not be lower than 20% of the current actual earnings distributed.

• (b) The Board of Directors is authorised to distribute all or part of the dividends and bonus in cash through a resolution adopted by a majority vote at a meeting of the Board of Directors attended by two-thirds of the total number of directors which shall be reported to the shareholders during their meeting.

• (c) When the Company has no deficit, the Board of Directors is authorised to distribute all or part of the legal reserve (for the part that exceeds 25% of paid-in capital) and capital surplus if it meets the requirements under the Company Act in cash through a resolution adopted by a majority vote at a meeting of the Board of Directors attended by two-thirds of the total number of directors which shall be reported to the shareholders during their meeting.

• C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

• D. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

• E. The appropriations of 2019 and 2018 earnings as resolved by the shareholders on June 12, 2020 and June 12, 2019, respectively are as follows:

• (a) The distribution of 2019 and 2018 earnings were as follows:

Legal surplus Cash dividends	23,046 $ 207,600 0.9708 $ 230,646 $ 2019 Amount Dividend per share	40,664 $ 363,500 1.70 $ 404,164 $ 2018 Amount Dividend per share	40,664 $ 363,500 1.70 $ 404,164 $ 2018 Amount Dividend per share
	23,046 $ 207,600 230,646 $ Amount	40,664 $ 363,500 404,164 $ Amount
			1.70 $

• (b) For the year ended December 31, 2019, the cash payment from capital surplus was $0.0294 per share, totaling $6,300 .

F. Events after the balance sheet date

On March 22, 2021, the Company’s Board of Directors proposed the distribution of 2020 earnings as follows:

~208~

Legal surplus Cash dividends	2020	2020
	Amount 48,424 $ 406,300 454,724 $	Dividend per share and cash distributed
		1.90 $

The aforementioned distribution of 2020 earnings has not yet been resolved by the shareholders.

(17) Operating revenue

Operating revenue
Revenue from contracts with customers	YearendedDecember31
	2020 20,128,205 $	2019
		15,469,871 $

The Company derives revenue from the transfer of goods at a point in time in the following geographicalzregions:

Year ended December 31,2020 Revenue from external customer contracts Year ended December 31,2019 Revenue from external customer contracts	China 16,190,543 $ China 11,232,581 $	Taiwan 3,171,880 $ Taiwan 3,797,872 $	Others 765,782 $ Others 439,418 $	Total
				20,128,205 $
				Total
				15,469,871 $

(18) Other income

Other gains and losses Rent income Advertising income Dividend income Other income Foreign exchange gains Gains on financial assets at fair value through profit or loss Gains (losses) on disposals of property, plant and equipment Others	2020 2019 6,897 6,907 13,131 11,100 24,105 20,593 16,310 24,929 60,443 $ 63,529 $ YearendedDecember31 2020 2019 98,148 $ 35,905 $ 2,568 10,696 74 161) ( - 992 100,790 $ 47,432 $ Year ended December 31

(19) Other gains and losses

~209~

(20) Expenses by nature

Expenses by nature
Employee benefit expense Salary expenses Labour and health insurance fees Pension costs Directors’ remuneration Other personnel expenses Depreciation Amortisation	Year ended December31
	2020 354,698 $ 25,237 13,721 15,350 16,039 14,382 3,361	2019
		245,909 $ 25,791 15,141 6,380 16,532 14,857 3,424

As at December 31, 2020 and 2019, the Company had 361 and 355 employees, respectively. There were 6 non-employee directors for both years.

Note: The abovementioned expenses were all operating expenses.

• A. (a) Average employee benefit expense was $1,154 and $869 for the years ended December 31, 2020 and 2019, respectively.

• (b) Average employees’ salaries were $999 and $705 for the years ended December 31, 2020 and 2019, respectively.

• (c) Adjustment of average employees’ salaries was 42% for the year ended December 31, 2020.

• B. The Company has no supervisors’ remuneration as it has set up an audit committee.

• C. Remuneration policy of the Company (including directors, managers and employees):

• (a) Directors’ remuneration policy

  • In accordance with the Articles of Incorporation of the Company, remuneration of the Company’s directors is determined by the Board of Directors based on the assessment of the remuneration committee according to their participation in the operations of the Company and the value of their contribution and by reference to general pay levels in the industry. The Articles of Incorporation of the Company also prescribes that no more than 3% of the profit of the current year shall be distributed as directors’ remuneration.

• (b) Managers’ remuneration policy:

  • Remuneration of the Company’s managers is proposed by the remuneration committee and discussed and determined by the Board of Directors based on individual performance and contribution to the overall operations of the Company, taking into consideration the Company’s future operating risk and general pay levels in the industry.

• (c) Employees’ compensation policy

  • i. The Company follows the Labor Standards Act and related regulations to formulate salaries and benefits for employees. Employees’ compensation includes monthly salaries, quarterly sales bonuses, employees’ compensation and performance bonus which are distributed based on a certain percentage of the Company’s distributable profit.

~210~

• ii. In accordance with the Articles of Incorporation of the Company, 3%~12% of the current year’s earnings, if any, shall be distributed as employees’ compensation. If the Company has accumulated deficit, earnings should be reserved to cover losses before calculating the distribution. The employees’ compensation shall be distributed in the form of shares or in cash to employees including the employees of subsidiaries who meet certain specific requirements.

• D. The Company’s directors’ remuneration and employees’ compensation accounted as operating expenses were as follows:

expenses were as follows:
Directors’ remuneration Employees’ compensation	YearendedDecember31
	2020 15,000 $ 18,000 33,000 $	2019
		6,000 $ 9,000
		15,000 $

• E. For the year ended December 31, 2020, the employees’ compensation and directors’ remuneration were estimated and accrued based on a certain percentage of distributable profit of current year as of the end of reporting period.

• F. The employees’ compensation of $9,000 and directors’ remuneration of $6,000 for 2019 were resolved by the Board of Directors and were in agreement with those amounts recognised in the 2019 financial statements.

• G. Information about employees’ compensation and directors’ remuneration of the Company as resolved at the meeting of the Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(21) Finance costs

Finance costs
Interest expense Other interest expense		Year ended December 31
		2020	2019

~211~

(22) Income taxes

A. Income tax expense

• (a) Components of income tax expense:

Components of income tax expense:
			YearendedDecember31
			2020	2019
Current tax:
Currrent tax on profits for the year		$	21,150	$	52,955
Prior year income tax (over)
underestimation	(		1,664)		8,593
Total current tax			19,486		61,548
Deferred tax:
Origination and reversal of temporary
differences	(		13,757)	(	13,190)
Total deferred tax	(		13,757)	(	13,190)
Income tax expense		$	5,729	$	48,358

• (b) The income tax (charge)/credit relating to components of other comprehensive income is as follows:

Remeasurement of defined benefit obligations

YearendedDecember31	YearendedDecember31
2020 1,124 $	2019
	30 $

• B. Reconciliation between income tax expense and accounting profit:

			YearendedDecember31	YearendedDecember31
			2020	2019
Tax calculated based on profit before tax and		$	95,551	$	55,788
statutory tax rate
Effects from items disallowed by tax regulation	(		88,158)	(	16,023)
Prior year income tax (over) underestimation	(		1,664)		8,593
Income tax expense		$	5,729	$	48,358

• C. Amounts of deferred tax assets or liabilities as a result of temporary differences is as follows:

~212~

January1 Deferred tax assets (liabilities): Unrealised loss on valuation loss and slow-moving inventories 31,192 $ Unrealised actuarial loss on defined benefit plan 4,351 Share of profit of subsidiaries accounted for using equity method 114,468) ( 78,925) ($ January1 Deferred tax assets (liabilities): Unrealised loss on valuation loss and slow-moving inventories 18,002 $ Unrealised actuarial loss on defined benefit plan 4,321 Share of profit of subsidiaries accounted for using equity method 114,468) ( 92,145) ($		2020

D. The amounts of deductible temporary differences that were not recognised as deferred tax assets are as follows:

are as follows:
E. The Company’s income tax returns through 2017 Authority. Deductible temporary differences	has been assessed and December31,2020 184,415 $	December31,2019
		243,718 $
		approved by the Tax

~213~

(23) Earnings per share

Earnings per share
Basic earnings per share Profit attributable to ordinary shareholders Diluted earnings per share Profit attributable to ordinary shareholders Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Profit attributable to ordinary shareholders plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary shareholders Diluted earnings per share Profit attributable to ordinary shareholders Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Profit attributable to ordinary shareholders plus assumed conversion of all dilutive potential ordinary shares		Year ended December 31,2020
		Profit after tax 472,025 $ 472,025 $ - 472,025 $ Year		Weighted average number of ordinary shares outstanding Earnings per (shares in thousands) share(in dollars) 213,825 2.21 $ 213,825 946 214,771 2.20 $ Weighted average number of ordinary shares outstanding Earnings per (shares in thousands) share(in dollars) 213,825 1.08 $ 213,825 576 214,401 1.08 $ ended December 31,2019	Earnings per share(in dollars)
					2.21 $
					2.20 $
				Weighted average number of ordinary shares outstanding (shares in thousands) 213,825 213,825 576 214,401

~214~

(24) Changes in liabilities from financing activities

										Liabilities from	Liabilities from
			Short-term	Short-term notes							financing
			borrowings	and	bills payable		Lease	liabilities		activities-gross
January 1, 2020		$	3,949,484	$	499,481		$	994		$	4,449,959
Changes in cash flow
from financing
activities			2,431,895		50,025	(		1,088)			2,480,832
Changes in other
non-cash items			-		-			854			854
December 31, 2020		$	6,381,379	$	549,506		$	760		$	6,931,645
										Liabilities from
			Short-term	Short-term notes							financing
			borrowings	and	bills payable		Lease	liabilities		activities-gross
January 1, 2019		$	5,441,866	$	599,403		$	2,138		$	6,043,407
Changes in cash flow
from financing
activities	(		1,492,382)	(	99,922)	(		1,144)	(		1,593,448)
December 31, 2019		$	3,949,484	$	499,481		$	994		$	4,449,959

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Refer to Note 4(3)B of the consolidated financial statements.

(2) Significant related party transactions

• A. Operating revenue

Operating revenue
Zenitron (HK) Limited Others		Year ended December 31,2020		Year ended December 31,2019
		7,259,607 $ 614,648 7,874,255 $		3,661,538 $ 237,575 3,899,113 $

The sales price to related parties was determined based on initial cost plus a certain mark-up. The collection term was 60~90 days after monthly billings for related parties and 30~120 days after monthly billings for third parties.

B. Purchases

Purchases
Zenitron (HK) Limited		Year ended December 31,2020		Year ended December 31,2019
		242,132 $		109,359 $

The price and term for purchases from related parties was the same with third parties. The payment term was 60~90 days after monthly billings for related parties and approximately 10~75 days after monthly billings for general suppliers.

~215~

December 31, 2019

C. Receivables from related parties

December 31, 2020

Accounts receivable

Accounts receivable	December31,2020	December31,2019
Payables to related parties Zenitron (HK) Limited Others Other receivables ZTHC (Shanghai) Co., Ltd. Others Accounts payable Zenitron (HK) Limited Other payables	1,065,084 $ 76,049 1,141,133 $ December 31,2020 217,600 $ 6,594 224,194 $ December31,2020 25,170 $ 19,524 44,694 $	454,209 $ 45,021
		499,230 $
		December 31,2019
		214,600 $ 5,835
		220,435 $
		December31,2019
		14,725 $ -
		14,725 $

D. Payables to related parties

E. Loans to /from related parties Loans to related parties

(i) Outstanding balance:

(i) Outstanding balance:
(ii) Interest income Endorsements and guarantees provided to related parties December 31,2020 ZTHC (Shanghai) Co., Ltd. 217,600 $ Year ended December 31,2020 ZTHC (Shanghai) Co., Ltd. 5,335 $ December 31,2020 Zenitron (HK) Limited 997,208 $ Zenitron (Shanghai) International Trading Co., Ltd. 294,079 Zenitron (Shenzhen) Technology Co., Ltd. 158,856 1,450,143 $	December 31,2019 214,000 $ Year ended December 31,2019
	5,509 $ December 31,2019
	576,273 $ 270,518 232,904 1,079,695 $

F. Endorsements and guarantees provided to related parties

G. Key management compensation

Key management compensation
Salaries and other short-term employee benefits	Year ended December31
	2020 $46,314	2019
		$ 36,845

~216~

8. PLEDGED ASSETS

The Company’s assets pledged as collateral are as follows:

Pledged assets Investment property Guarantee deposits paid (shown as ‘other non-current assets’)	December 31, December 31, 2020 2019 2,945 $ 3,023 $ 10,000 10,000 12,945 $ 13,023 $ Bookvalue	Purpose
	December 31, 2020 2,945 $ 10,000 12,945 $
		Short-term borrowings Court deposits

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

(1) Contingencies

None.

(2) Commitments

As of December 31, 2020, other significant commitments were as follows:

As a requirement for the release of imported goods before duty and customs clearance, the Company has applied for customs guarantee with certain banks in the amount of $20,000.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

The distribution of 2020 earnings was resolved by the Company’s Board of Directors on March 22, 2021. Refer to Note 6(16) for more details.

12. OTHERS

(1) Capital risk management

The Company’s main objective when managing capital is to maintain an optimal credit ranking and capital ratio to support the operations and to maximize stockholders’ equity. Refer to the parent company only balance sheet of each period for related liabilities and capital ratio.

(2) Financial instruments

• A. Financial instruments by category

~217~

Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instrument Financial assets at amortised cost/receivables Cash and cash equivalents Notes receivable Accounts receivable (including related parties) Other receivables (including related parties) Guarantee deposits paid (shown as ‘other non- current assets) Financial liabilities Financial liabilities at amortised cost Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable (including related parties) Other accounts payable Guarantee deposits received (shown as ‘other non-current assets’) Lease liabilities	December 31,2020 14,626 $ 904,967 $ 562,899 $ 11,770 5,498,594 322,263 43,337 6,438,863 $ December 31,2020 6,381,379 $ 549,506 2,496 2,551,338 250,499 3,139 9,738,357 $ 760 $	December 31,2019
		32,196 $
		713,542 $
		465,932 $ 9,313 4,143,698 293,792 42,338
		4,955,073 $
		December 31,2019
		3,949,484 $ 499,481 3,664 1,775,670 162,485 3,187
		6,393,971 $
		994 $

• B. Financial risk management policies

• (a) The Company’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Company’s entire risk management policies is to identify and analyse all the risks by examining the impact of the macroeconomics, industrial developments, market competition and the Company’s business development so as to achieve the optimised risk position, to maintain adequate liquidity position and to centralise the management of all market risks.

• (b) Risk management is carried out by a central treasury department under policies approved by the Board of Directors. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters.

~218~

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

• i. The Company operates internationally and is exposed to foreign exchange risk arising from various currency, primarily with respect to the USD. Foreign exchange rate risk arises from future commercial transactions and recognised assets, liabilities and net investments in foreign operations.

• ii. The Company’s businesses involve some non-functional currency operations. The information on assets, liabilities denominated in foreign currencies and market risk whose values would be materially affected by the exchange rate fluctuations is as follows:

(Foreign currency: functional currency) Financial assets Monetary items USD JPY HKD RMB Investments accounted for using equity method USD HKD Financial liabilities Monetary items USD JPY HKD			December 31,2020	December 31,2020
	Foreign currency amount (In thousands)	Exchange rate	Book value (In thousands of NTD)		Sensitivityanalysis
				Degree of variation	Effect on profit or loss	Effect on other comprehensive income
	199,209 $ 230,186 836 55,091 84,790 $ 9,075 281,890 $ 53,597 468	28.43 0.27 3.64 4.35 28.48 3.67 28.53 0.28 3.70	5,663,512 $ 62,150 3,034 239,646 2,414,819 $ 33,317 8,042,322 $ 15,007 1,732	1% 1% 1% 1% - - 1% 1% 1%	56,635 $ 622 30 2,396 - - 80,423 $ 150 17	- $ - - - - - - $ - -

~219~

December 31, 2019

(Foreign currency: functional currency) Financial assets Monetary items USD JPY RMB Investments accounted for using equity method USD HKD Financial liabilities Monetary items USD JPY	Foreign currency amount (In thousands)	Exchange rate	Book value (In thousands of NTD)		Sensitivityanalysis	Sensitivityanalysis
				Degree of variation	Effect on profit or loss	Effect on other comprehensive income
	142,763 $ 181,021 54,037 72,970 $ 7,751 148,837 $ 135,897	29.93 0.27 4.28 29.98 3.85 30.03 0.28	4,727,897 $ 48,876 231,278 2,187,631 $ 29,836 4,469,575 $ 38,051	1% 1% 1% - - 1% 1%	42,729 $ 489 2,313 - - 44,696 $ 381	- $ - - - - - $ -

• iii. The total exchange gain, including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2020 and 2019, amounted to $98,148 and $35,905, respectively.

• (b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. According to the Company’s credit policy, the Company is responsible for managing and analysing the credit risk for each of their clients. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. The utilisation of credit limits is regularly monitored. Credit risk arises from credit exposures to customers, including outstanding receivables.

• ii. The Company adopts the following assumptions to assess whether there has been a significant increase in credit risk on that instrument since initial recognition:

  • (i) If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

  • (ii) If any external credit rating agency rates these bonds as investment grade, the credit risk of these financial assets is low.

• iii. The default occurs when the contract payments are past due over 60 days.

• iv. The Company classifies customer’s accounts receivable in accordance with the credit rating of the customer. The Company applies the modified approach using a provision matrix to estimate the expected credit loss.

• v. The Company wrote-off the financial assets, which cannot be reasonably expected to be

~220~

recovered, after initiating recourse procedures. However, the Group will continue executing the recourse procedures to secure their rights.

• vi. The Company used the forecastability to adjust historical and timely information to assess the default possibility of accounts receivable. Please refer to Note 6(4) for details of the provision matrix and movements in loss allowance for the years ended December 31, 2020 and 2019.

• (c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Company and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Company’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets.

• ii. Except for those listed in the table below, the Company’s non-derivative financial liabilities will expire within 1 year. As of December 31, 2020 and 2019, the cash flows within 1 year of short-term borrowings, short-term notes and bills payable, notes payable, accounts payable (including related parties) and other payables are undiscounted and are in agreement with the balance of each account in the balance sheet.

December 31, 2020 Non-derivative financial liabilities: Lease liabilities December 31, 2019 Non-derivative financial liabilities: Lease liabilities	Less than 1year $413 Less than 1year $ 878	Between 2 and 5 years $ 356 Between 2 and 5 years $123	Over5 years
			- $
			Over5 years
			- $

• iii. The Company does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis will be significantly earlier, nor expect the actual cash flow amount will be significantly different.

(3) Fair value information

• A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. An active market refers to a market in which

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transactions for an asset or liability take place with enough frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company’s investment in listed stocks and OTC stocks is included in Level 1.

• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

• Level 3: Unobservable inputs for the asset or liability. The fair value of the Company’s investment in equity investment without active market is included in Level 3.

• B. Financial and non-financial instruments measured at fair value

• (a) The related information on financial and non-financial instruments measured at fair value by level based on the nature, characteristics and risks of the assets and liabilities are as follows:

December 31, 2020 Level 1 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Listed stocks 14,626 $ Financial assets at fair value through other comprehensive income Listed stocks 858,283 Emerging stocks 573 Unlisted stocks - 873,482 $ December 31, 2019 Level 1 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Listed stocks 32,196 $ Financial assets at fair value through other comprehensive income Listed stocks 666,941 Emerging stocks 490 Unlisted stocks - 699,627 $	Level 2 - $ - - - - $ Level 2 - $ - - - - $	Level3 - $ - - 46,111 46,111 $ Level3 - $ - - 46,111 46,111 $	Total
			14,626 $ 858,283 573 46,111
			919,593 $
			Total
			32,196 $ 666,941 490 46,111
Financial assets at fair value through profit or loss Listed stocks Financial assets at fair value through other comprehensive income Listed stocks Emerging stocks Unlisted stocks
			745,738 $

(b) The methods and assumptions the Company used to measure fair value are as follows:

• i. For the instruments the Company used market quoted prices as their fair values (that is, Level 1), the Company uses the closing price as market quoted price.

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• ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the parent company only balance sheet date.

• iii. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Company’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk etc. In accordance with the Company’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the parent company only balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.

• iv. The Group considers adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Group’s credit quality.

• C. As of December 31, 2020 and 2019, there was no transfer between Level 1 and Level 2.

• D. As of December 31, 2020 and 2019, there was no transfer into or out from Level 3.

• E. Investment segment is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating, updating inputs used to the valuation model and making any other necessary adjustments to the fair value.

• F. The following is the qualitative information on significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

value measurement:
Non-derivative equity instrument: Unlisted shares		Fair value at December 31, 2020	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fair value
		46,111 $	Net asset value	Not applicable	Not applicable	Not applicable

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Non-derivative equity instrument: Unlisted shares Unlisted shares		Fair value at December 31, 2019	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fair value
		27,500 $ 18,611 46,111 $	Most recent non-active market price Net asset value	Not applicable Not applicable	Not applicable Not applicable	Not applicable Not applicable

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

• A. Loans to others: Please refer to table 1.

• B. Provision of endorsements and guarantees to others: Please refer to table 2.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.

• D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital: None.

• E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.

• F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.

• G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 4.

• H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 5.

• I. Trading in derivative instruments undertaken during the reporting periods: None.

• J. Significant inter-company transactions during the reporting periods: Please refer to table 6.

• (2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 7.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 8.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to Notes (1) A, B and J.

(4) Major shareholders information

The Company has no shareholders with a shareholding ratio above 5%.

14. SEGMENT INFORMATION

None.

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Zenitron Corporation Loans to others

Year ended December 31, 2020

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

Amount of transactions with the borrower (Note 5) Reason for short- term financing (Note 6) Allowance for doubtful accounts Maximum outstanding balance during the year ended December 31, 2020 (Note 3) Balance at December 31, 2020(Note 8) Actual amount drawn down Interest rate Nature of loan (Note 4) No. (Note 1) Creditor Borrower General ledger account (Note 2) Is a related party	Collateral	Limit on loans granted to a single party (Note 7)	Ceiling on total loans granted (Note 7)	Footnote
	Item Value
0 Zenitron Coporation ZTHC (Shanghai) Co., Ltd. Other receivables Yes $ 749,450 $ 609,280 $ 217,600 2.50% 2 - $ Operating capital - $ 1 ZTHC (Shanghai) Co., Ltd. Zenitron (Shanghai) International Trading Co., Ltd. Other receivables Yes 87,600 87,600 - - 2 - Operating capital - 1 ZTHC (Shanghai) Co., Ltd. Zenitron (Shenzhen) Technology Co., Ltd. Other receivables Yes 262,800 262,800 109,500 2.50% 2 - Operating capital - 2 Shanghai Zenitron Electronic Trading Co., Ltd Zenitron (Shanghai) International Trading Co., Ltd. Other receivables Yes 52,560 52,560 43,800 4.35% 2 - Operating capital - 3 Yo-Teh Investment Corporation Raytronic Corporation Other receivables Yes 20,000 - - - 2 - Operating capital -	- - $ - - - - - - - -	$ 1,920,623 652,676 652,676 179,198 23,070	$ 1,920,623 652,676 652,676 179,198 23,070

• Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:

• (1) The Company is ‘0’.

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

• Note 2: The name of account in which the loans are recognised, such as receivables–related parties, current account with stockholders, prepayments, temporary payments, etc. Note 3: The maximum outstanding balance of loans to others for the year. Note 4: The nature of the loan as follows:

(1)‘1’ for business transaction.

(2)‘2’ for short-term financing.

• Note 5: The amount of business transactions when nature of the loan is 1, which is the amount of business transactions occurred between the creditor and borrower in the current year.

• Note 6: Purpose of loan when nature of loan is 2, for example, repayment of loan, acquisition of equipment, working capital, etc.

• Note 7: Limit on loans granted to a single party and ceiling on total loans granted as prescribed in the creditor company’s “Procedures for Provision of Loans”, the calculation and amount are as follows:

(1) Limit on loans granted to a single party is 40% of the creditor company’s net assets based on the latest financial statements.

• (2) Ceiling on total loans granted is 40% of the creditor company’s net assets based on the latest financial statements.

• (3) Limit on loans granted between foreign companies which the Company directly or indirectly holds 100% of their voting shares is 200% of the creditor company’s net assets based on the latest financial statements.

• Note 8: The amounts of funds to be loaned to others which have been approved by the board of directors of a public company in accordance with Article 14, Item 1 of the “Regulations Governing Loaning of Funds and Making of

• Endorsements/Guarantees by Public Companies” should be included in its published balance of loans to others at the end of the reporting period to reveal the risk of loaning the public company bears, even though they have not yet been appropriated.

However, this balance should exclude the loans repaid when repayments are done subsequently to reflect the risk adjustment. In addition, if the board of directors of a public company has authorized the chairman to loan funds in instalments

or in revolving within certain lines and within one year in accordance with Article 14, Item 2 of the “Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies”,

the published balance of loans to others at the end of the reporting period should also include these lines of loaning approved by the board of directors, and these lines of loaning should not be excluded from this balance even though

the loans are repaid subsequently, for taking into consideration they could be loaned again thereafter.

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Expressed in thousands of NTD (Except as otherwise indicated)

Zenitron Corporation

Provision of endorsements and guarantees to others

Year ended December 31, 2020

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Table 2
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Number (Note 1) Endorser/ guarantor	Party being endorsed/guaranteed	Limit on endorsements/ guarantees provided for a single party (Note 3)	Maximum outstanding endorsement/ guarantee amount as of December 31, 2020 (Note 4)	Outstanding endorsement/ guarantee amount at December 31, 2020 (Note 5)	Actual amount drawn down (Note 6)	Amount of endorsements/ guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/guarantor company	Ceiling on total amount of endorsements/ guarantees provided (Note 3)	Provision of endorsements/ guarantees by parent company to subsidiary (Note 7)	Provision of endorsements/ guarantees by subsidiary to parent company (Note 7)	Provision of endorsements/ guarantees to the party in Mainland China (Note 7)	Footnote
	Companyname Relationship with the endorser/ guarantor (Note2)
0 Zenitron Coporation 0 Zenitron Coporation 0 Zenitron Coporation 0 Zenitron Coporation	Zenitron (HK) Limited 3 Zenitron (Shenzhen) Technology Co., Ltd. 3 Zenitron (Shanghai) International Trading Co., Ltd. 3 ZTHC (Shanghai) Co., Ltd. 3	7,202,337 $ 7,202,337 7,202,337 7,202,337	2,109,080 $ 538,160 658,929 462,200	2,086,640 $ 536,600 657,060 455,580	997,208 $ 158,856 294,079 -	- $ - - -	43.46% 11.18% 13.68% 9.49%	7,202,337 $ 7,202,337 7,202,337 7,202,337	Y Y Y Y	N N N N	N Y Y Y

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

• (1) The Company is ‘0’.

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

Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following six categories; fill in the number of category each case belongs to: (1) Having business relationship.

(2) The endorser/guarantor parent company owns directly more than 50% voting shares of the endorsed/ guaranteed subsidiary.

• (3) The endorser/guarantor parent company and its subsidiaries jointly own more than 50% voting shares of the endorsed/ guaranteed company.

• (4) The endorsed/guaranteed parent company directly or indirectly owns more than 50% voting shares of the endorser/guarantor subsidiary.

• (5) Mutual guarantee of the trade as required by the construction contract.

(6) Due to joint venture, each shareholder provides endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

Note 3: The calculation for and amount of limit on endorsements/guarantees are as follows: (If any contingent loss is recognised in the financial statements, the recognised amount should be indicated)

(1) Limit on endorsements/guarantees provided for a single party is 150% of the Company’s net assets.

(2) Ceiling on total amount of endorsements/guarantees is 150% of the Company's net assets.

Note 4: The year-to-date maximum outstanding balance of endorsements/guarantees provided as of the reporting period.

Note 5: Once endorsement/guarantee contracts or promissory notes are signed/issued by the endorser/guarantor company to the banks, the endorser/guarantor company bears endorsement/guarantee liabilities. And all other events involve endorsements and guarantees should be included in the balance of outstanding endorsements and guarantees.

Note 6: The actual amount of endorsements/guarantees used by the endorsed/guaranteed company.

Note 7:‘Y’ for those cases of provision of endorsements/guarantees by listed parent company to subsidiary and provision by subsidiary to listed parent company, and provision to the party in Mainland China.

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Table 3

Expressed in NTD

Zenitron Corporation

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

December 31, 2020

(Except as otherwise indicated)

Securities held by	Marketable securities(Note 1)	Relationship with the securities issuer (Note 2)	General ledger account		As of Dece	mber 31,2020		Footnote (Note 4)
				Number of shares (Share/Unit)	Book value (Note 3)	Ownership (%)	Fair value
Zenitron Corporation Zenitron Corporation Zenitron Corporation Zenitron Corporation Zenitron Corporation Zenitron Corporation Zenitron Corporation Zenitron Corporation Zenitron Corporation Zenitron Corporation Zenitron Corporation Raytronic Corporation Raytronic Corporation Raytronic Corporation Yo-Teh Investment Corporation Yo-Teh Investment Corporation Supertronic International Corp	Stock Tong Yang Industry Co., Ltd. Stock Yeong Guan Group Stock TrueLight Corporation Stock Cyber Power Systems, Inc. Stock LuxNet Corporation Stock Casetek Holdings Limited Stock ADLINK TECHNOLOGY INC. Stock Orient Pharma Co., Ltd. Stock NU INC. Stock Quadlink Technology Inc. Stock MEAN WELL ENTERPRISES CO., LTD. Stock Yeong Guan Group Stock ICHIA TECHNOLOGIES, INC. Stock Orient Pharma Co., Ltd. Stock Tong Yang Industry Co., Ltd. Stock WISECHIP SEMICONDUCTOR INC. Stock Capital Investment Development Corp.	- - - - - - - - - - - - - - - - -	Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through other comprehensive income Current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Non-current financial assets at fair value through other comprehensive income	44,000 93,834 7,000 16,000 16,291 34,439 13,537,592 39,462 1,136,364 500,000 100,000 51,087 165,000 17,454 20,000 58,103 2,000,000	1,716,000 $ 7,731,922 311,850 1,420,800 439,042 3,006,525 858,283,333 572,988 8,610,838 10,000,000 27,500,000 4,209,569 3,052,500 253,432 780,000 2,385,128 49,783,496	0.01 0.08 0.01 0.02 0.01 0.01 6.22 0.02 7.89 3.62 0.07 0.05 0.05 0.01 0.00 0.13 3.57	1,716,000 $ 7,731,922 311,850 1,420,800 439,042 3,006,525 858,283,333 572,988 8,610,838 10,000,000 27,500,000 4,209,569 3,052,500 253,432 780,000 2,385,128 49,783,496

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities within the scope of IFRS 9 ‘Financial instruments’.

Note 2: Leave the column blank if the issuer of marketable securities is non-related party.

Note 3: Fill in the amount after adjusted at fair value and deducted by accumulated impairment for the marketable securities measured at fair value; fill in the acquisition cost or amortised cost deducted by accumulated impairment for the marketable securities not measured at fair value.

Note 4: The number of shares of securities and their amounts pledged as security or pledged for loans and their restrictions on use under some agreements should be stated in the footnote if the securities presented herein have such conditions.

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Table 4

Expressed in thousands of NTD (Except as otherwise indicated)

Zenitron Corporation

Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more Year ended December 31, 2020

Purchaser/seller	Counterparty	Relationship with the counterparty (Note 2)			Transaction		Differences in tra	nsaction terms compared to third party transactions (Note 1)	Notes/accoun	ts receivable(payable)	Footnote (Note 3)
			Purchases (sales)	Amount	Percentage of total purchases(sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Zenitron Coporation Zenitron (HK) Limited Zenitron Coporation Zenitron (Shanghai) International Trading Co., Ltd. Zenitron Coporation Zenitron (Shenzhen) Technology Co., Ltd. Zenitron (HK) Limited Zenitron (Shenzhen) Technology Co., Ltd. Zenitron (HK) Limited Zenitron (Shanghai) International Trading Co., Ltd. Zenitron (HK) Limited Zenitron Coporation	Zenitron (HK) Limited Zenitron Coporation Zenitron (Shanghai) International Trading Co., Ltd. Zenitron Coporation Zenitron (Shenzhen) Technology Co., Ltd. Zenitron Coporation Zenitron (Shenzhen) Technology Co., Ltd. Zenitron (HK) Limited Zenitron (Shanghai) International Trading Co., Ltd. Zenitron (HK) Limited Zenitron Coporation Zenitron (HK) Limited	1 2 1 2 1 2 3 3 3 3 2 1	Sales Purchases Sales Purchases Sales Purchases Sales Purchases Sales Purchases Sales Purchases	($ 7,259,607) 7,259,607 ( 402,271) 402,271 ( 212,346) 212,346 ( 526,494) 526,494 ( 565,070) 565,070 ( 242,132) 242,132	(36) 40 (2) 33 (1) 25 (3) 63 (3) 46 (1) 1	Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings Approximately 60~90 days after monthly billings	Selling price is based on initial cost plus necessary profit Approximately the same as the normal price Selling price is based on initial cost plus necessary profit Approximately the same as the normal price Selling price is based on initial cost plus necessary profit Approximately the same as the normal price Selling price is based on initial cost plus necessary profit Approximately the same as the normal price Selling price is based on initial cost plus necessary profit Approximately the same as the normal price Selling price is based on initial cost plus necessary profit Approximately the same as the normal price	Approximately 30~120 days after monthly billings for third parties Approximately 10~75 days after monthly billings for third parties Approximately 30~120 days after monthly billings for third parties Approximately 10~75 days after monthly billings for third parties Approximately 30~120 days after monthly billings for third parties Approximately 10~75 days after monthly billings for third parties Approximately 30~120 days after monthly billings for third parties Approximately 10~75 days after monthly billings for third parties Approximately 30~120 days after monthly billings for third parties Approximately 10~75 days after monthly billings for third parties Approximately 30~120 days after monthly billings for third parties Approximately 10~75 days after monthly billings for third parties	1,065,084 $ ( 1,065,084) 48,040 ( 48,040) 28,009 ( 28,009) 52,296 ( 52,296) 62,580 ( 62,580) 25,170 ( 25,170)	19 (39) 1 (27) 1 (31) 1 (57) 2 (35) 1 (1)

Note 1: If terms of related-party transactions are different from third-party transactions, explain the differences and reasons in the ‘Unit price’ and ‘Credit term’ columns.

Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to:

(1) Parent company to subsidiary.

(2) Subsidiary to parent company.

• (3) Subsidiary to subsidiary.

• Note 3: In case related-party transaction terms involve advance receipts (prepayments) transactions, explain in the footnote the reasons, contractual provisions, related amounts, and differences in types of transactions compared to third-party transactions.

Note 4: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

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Table 5

Zenitron Corporation

Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more

Year ended December 31, 2020

Expressed in thousands of NTD

(Except as otherwise indicated)

Creditor	Counterparty	Relationship with the counterparty (Note 2)	Balance as at December 31, 2020 (Note 1)	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Action taken
Accounts receivable Zenitron Coporation Other receivables Zenitron Coporation ZTHC (Shanghai) Co., Ltd.	Zenitron (HK) Limited ZTHC (Shanghai) Co., Ltd. Zenitron (Shenzhen) Technology Co., Ltd.	1 1 3	1,065,084 $ 217,600 109,371	9.56 - -	- $ - -	- - -	503,313 $ - -	- $ - -

Note 1: Fill in separately the balances of accounts receivable–related parties, notes receivable–related parties, other receivables–related parties…. Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to

(1) Parent company to subsidiary.

• (2) Subsidiary to parent company.

(3) Subsidiary to subsidiary.

Note 3: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

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Zenitron Corporation

Table 6

Expressed in thousands of NTD

(Except as otherwise indicated)

Significant inter-company transactions during the reporting period

Year ended December 31, 2020

Transaction

						Transaction
Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets (Note 3)
0 0 0 0 0 0 0 1 1 1 1 1 1 2	Zenitron Coporation Zenitron Coporation Zenitron Coporation Zenitron Coporation Zenitron Coporation Zenitron Coporation Zenitron Coporation Zenitron (HK) Limited Zenitron (HK) Limited Zenitron (HK) Limited Zenitron (HK) Limited Zenitron (HK) Limited Zenitron (HK) Limited ZTHC (Shanghai) Co., Ltd.	Zenitron (HK) Limited Zenitron (HK) Limited Zenitron (Shanghai) International Trading Co., Ltd. Zenitron (Shanghai) International Trading Co., Ltd. Zenitron (Shenzhen) Technology Co., Ltd. Zenitron (Shenzhen) Technology Co., Ltd. ZTHC (Shanghai) Co., Ltd. Zenitron Coporation Zenitron Coporation Zenitron (Shenzhen) Technology Co., Ltd. Zenitron (Shenzhen) Technology Co., Ltd. Zenitron (Shanghai) International Trading Co., Ltd. Zenitron (Shanghai) International Trading Co., Ltd. Zenitron (Shenzhen) Technology Co., Ltd.	1 1 1 1 1 1 1 2 2 3 3 3 3 3	Sales Accounts receivable Sales Accounts receivable Sales Accounts receivable Other receivables Sales Accounts receivable Sales Accounts receivable Sales Accounts receivable Other receivables	$ 7,259,607 1,065,084 402,271 48,040 212,346 28,009 217,600 242,132 25,170 526,494 52,296 565,070 62,580 109,371	Selling price has no obvious difference from the third parties 60~90 days after monthly billings Selling price has no obvious difference from the third parties 60~90 days after monthly billings Selling price has no obvious difference from the third parties 60~90 days after monthly billings In accordance with mutual agreements Selling price has no obvious difference from the third parties 60~90 days after monthly billings Selling price has no obvious difference from the third parties 60~90 days after monthly billings Selling price has no obvious difference from the third parties 60~90 days after monthly billings In accordance with mutual agreements	�� � � � � � � � � � � � � �

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

• (1) Parent company is ‘0’.

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

• Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to:

• (1) Parent company to subsidiary.

• (2) Subsidiary to parent company.

• (3) Subsidiary to subsidiary.

• Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

• Note 4: The Company may decide to disclose or not to disclose transaction details in this table based on the Materiality Principle.

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Zenitron Corporation

Information on investees

Table 7

Expressed in thousands of NTD

Year ended December 31, 2020

Investor Investee (Notes 1 and 2) Location Main business activities	Initial inves	tment amount	Shares h	eld as at December 31,2020	Net profit (loss) of the investee for the year ended December 31, 2020 (Note 2(2))	(Except as othe Investment income recognised by the Company for the year ended	rwise indicated) Footnote
	Balance as at December 31,2020	Balance as at December 31,2019	Number of shares (in thousand)	Ownership (%) Book value
Zenitron Coporation Raytronic Corporation Taiwan Trading of electronic components and assembly Zenitron Coporation Zenitron (HK) Limited Hong Kong Trading of electronic components and assembly Zenitron Coporation Supertronic International Corp. B. V. I. Reinvested holding company Zenitron Coporation Yo-Teh Investment Corporation Taiwan Reinvested holding company Supertronic International Corp. Zenitron (HK) Limited Hong Kong Trading of electronic components and assembly Supertronic International Corp. Zenicom (HK) Limited Hong Kong Trading of electronic components and assembly	$ 55,854 2,008 618,023 84,167 471,639 92,780	$ 55,854 2,008 618,023 185,000 471,639 92,780	1,520 510 18,704 7,700 34,272 23,800	100.00 $ 30,475 1.47 33,316 100.00 2,414,819 100.00 57,676 98.53 2,233,123 100.00 87,490	$ 2,321 302,614 301,241 47,832 302,614 348	$ 2,321 4,448 301,241 47,832 298,166 348	Subsidiary Second-tier subsidiary Subsidiary Subsidiary Subsidiary Subsidiary

Note 1: If a public company is equipped with an overseas holding company and takes consolidated financial report as the main financial report according to the local law rules, it can only disclose the information of the overseas holding company about the disclosure of related overseas investee information.

Note 2: If situation does not belong to Note 1, fill in the columns according to the following regulations:

• (1) The columns of ‘Investee’, ‘Location’, ‘Main business activities’, Initial investment amount’ and ‘Shares held as at December 31, 2020’ should fill orderly in the Company’s (public company’s) information on investees and

every directly or indirectly controlled investee’s investment information, and note the relationship between the Company (public company) and its investee each (ex. direct subsidiary or indirect subsidiary) in the ‘footnote’ column.

• (2) The ‘Net profit (loss) of the investee for the year ended December 31, 2020’ column should fill in amount of net profit (loss) of the investee for this period.

(3) The ‘Investment income (loss) recognised by the Company for the year ended December 31, 2020’ column should fill in the Company (public company) recognised investment income (loss) of its direct subsidiary and recognised investment income (loss) of its investee accounted for under the equity method for this period. When filling in recognised investment income (loss) of its direct subsidiary, the Company (public company) should confirm that direct subsidiary’s net profit (loss) for this period has included its investment income (loss) which shall be recognised by regulations.

~231~

Zenitron Corporation

Information on investments in Mainland China

Year ended December 31, 2020

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Table 8
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Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in capital	Investment method (Note 1)	Accumulated amount of remittance from Taiwan to Mainland China as of January1,2020	Amount remitt to Mainland remitted back t year ended Dec	ed from Taiwan China/Amount o Taiwan for the ember 31,2020	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2020	Net income (loss) of investee for the year ended December 31, 2020	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31, 2020 (Note 2)	Book value of investments in Mainland China as of December 31, 2020	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2020	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Zenitron (Shanghai) International Trading Co., Ltd. ZTHC (Shanghai) Co., Ltd. Zenitron (Shenzhen) Technology Co., Ltd. Shanghai Zenitron Electronic Trading Co., Ltd.	Trading of electronic components and assembly Selling computer memory equipment and related components and providing technical support Trading of electronic components and assembly Trading of electronic components and assembly	$ 157,730 116,601 93,080 94,760	(2) (2) (2) (2)	$ 97,270 116,601 32,620 -	- $ - - -	- $ - - -	$ 97,270 116,601 32,620 -	$ 16,589 48,087 14,044 524	100.00 100.00 100.00 100.00	$ 16,589 48,087 14,044 524	181,056 $ 326,338 68,438 89,599	- $ - - -

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2020	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs(MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
Zenitron Corporation	246,491 $	443,484 $	2,880,935 $

Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:

(1) Directly invest in a company in Mainland China.

(2) Through investing in Zenitron (HK) Limited, an existing company in the third area, which then invested in the investee in Mainland China.

(3) Others

Note 2: Basis for investment income (loss) recognition is the financial statements that are audited and attested by R.O.C. parent company’s CPA. Note 3: The numbers in this table are expressed in New Taiwan Dollars.

~232~

ZENITRON CORPORATION STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Statement 1

Statement 1
Item Cash on hand and revolving funds Cash in banks Checking accounts Demand deposits - NTD Demand deposits - foreign currency	Description		Amount
	USD 8,037 thousand Exchange rate 28.43 JPY 136,323 thousand Exchange rate 0.27 HKD 641 thousand Exchange rate 3.64 RMB 5,091 thousand Exchange rate 4.35		192 $ 47,355 224,981 228,487 37,394 2,335 22,155 562,899 $

~233~

ZENITRON CORPORATION

CURRENT FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME DECEMBER 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Statement 2

Statement 2
Name of Financial Instrument	Description	Shares in thousands/thousand units	Face Value	Total Amount	Interest Rate	Cost	Fair Value		Note
							Unit Price (in dollars)	Total Amount
Listed stocks Emerging stocks	ADLINK TECHNOLOGY INC. Orient Pharma Co., Ltd.	13,538 39	10 $ 10	858,283 $ 573	- -	347,990 $ 2,462 350,452 $	63.40 $ 14.52	858,283 $ 573 858,856 $

~234~

ZENITRON CORPORATION STATEMENT OF ACCOUNTS RECEIVABLE

DECEMBER 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Statement 3 Client Name		Amount	Note
Non-related parties Company A Others Less: Allowance for uncollectible accounts	720,577 $ 3,707,440 4,428,017 70,556) ( 4,357,461 $		Balance of each client has not exceeded 5% of total account balance

~235~

ZENITRON CORPORATION STATEMENT OF INVENTORIES DECEMBER 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Statement 4

Statement 4
Item		Amount			Note
		Cost		Net Realizable Value
Merchandise Inventory in transit Less: Allowance for market value decline and loss on obsolete and slow-moving inventories		4,175,374 $ 346,610 4,521,984 224,747) ( 4,297,237 $		3,950,627 $ 346,610 4,297,237 $

~236~

ZENITRON CORPORATION

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Statement 5

Statement 5
Name of Investee	Beginning	Balance	Addition		Decrease		EndingBalance			Market Value or Net Assets Value		Collateral	Note
	Shares (inthousands)	Amount	Shares (inthousands)	Amount (Note1)	Shares (inthousands)	Amount (Note2)	Shares (inthousands)	Percentage of Ownership	Amount	UnitPrice	Total Amount
Supertronic International Corp. Zenitron (HK) Limited Yo-Teh Investment Corporation Raytronic Corporation	18,704 510 17,783 1,520	2,187,631 $ 29,836 111,749 28,154 2,357,370 $	- - - -	227,188 $ 3,480 47,832 2,321 280,821 $	- - 10,083) ( -	- $ - 101,905) ( -	18,704 510 7,700 1,520	100% 1.47% 100% 100%	2,414,819 $ 33,316 57,676 30,475	129.11 $ 65.33 7.49 20.00	2,414,819 $ 33,316 57,676 30,475 2,536,286 $	None " " "
						101,905) ($			2,536,286 $

Note 1: It included exchange differences on translation of financial statements and share of profit or loss or other comprehensive income of subsidiaries accounted for using the equity method. Note 2: It referred to cash dividends distributed by the subsidiaries and proceeds from capital reduction.

~237~

ZENITRON CORPORATION STATEMENT OF SHORT-TERM BORROWINGS DECEMBER 31, 2020

(Expressed in thousands of New Taiwan Dollars)

STATEMENT 6

STATEMENT 6
Creditor	Description	EndingBalance	Contract Period	Range of Interest Rate	Credit Line	Collateral	Note
Hua Nan Bank Bank SinoPac Taiwan Cooperative Bank Taiwan Business Bank Yuanta Bank Land Bank of Taiwan Cathay United Bank SCSB Bank of Taiwan Mega International Commercial Bank Taichung Commercial Bank Taipei Fubon Bank E.SUN Bank Bank of Panhsin Taishin Bank Shin Kong Bank Jih Sun Bank Bank of Kaohsiung First Commercial Bank EnTie Bank Far Eastern International Bank	Unsecured borrowings	730,530 $ 567,535 542,070 456,480 450,000 388,193 342,360 340,628 318,147 283,703 274,765 244,282 234,629 227,355 223,319 185,445 150,000 150,000 127,653 100,000 44,285 6,381,379 $	2020/10/13~2021/03/10 2020/12/10~2021/01/25 2020/09/15~2021/03/21 2020/09/30~2021/04/27 2020/12/04~2021/03/26 2020/09/30~2021/06/11 2020/12/25~2021/01/25 2020/08/14~2021/06/08 2020/11/17~2021/03/17 2020/12/30~2021/03/30 2020/10/12~2021/05/14 2020/10/20~2021/06/08 2020/11/26~2021/06/18 2020/10/08~2021/06/08 2020/09/21~2021/03/19 2020/12/30~2021/06/28 2020/11/16~2021/02/05 2020/12/07~2021/03/30 2020/11/20~2021/05/19 2020/10/14~2021/01/12 2020/10/22~2021/02/19	Note	1,200,000 $ 750,000 800,000 512,000 600,000 400,000 360,000 360,000 500,000 600,000 400,000 330,000 500,000 300,000 400,000 200,000 300,000 300,000 700,000 300,000 500,000	Note 8 None	Undrawn secured borrowing facilities

Note: Range of interest rate of the Company’s borrowings was 0.64%~1.21%.

~238~

ZENITRON CORPORATION STATEMENT OF ACCOUNTS PAYABLE DECEMBER 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Statement 7

Statement 7
Supplier Name	Description		Amount	Note
Non-related parties Company A Company B Company C Company D Company E Others			752,075 $ 583,386 320,379 147,412 141,438 561,954 2,506,644 $	Balance of each client has not exceeded 5% of total account balance

~239~

ZENITRON CORPORATION STATEMENT OF OPERATING REVENUE FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Statement 8

Statement 8
Item	Volume(in thousands)		Amount	Note
Sales revenue Memory cards Linear integrated circuit Digital integrated circuit Power field effect transistors Logic integrated circuit Module Others Net operating revenue	38,140 471,651 134,859 797,673 47,101 1,416 2,393,572		8,779,188 $ 3,043,065 2,377,501 1,706,660 1,253,233 473,524 2,495,034 20,128,205 $

~240~

ZENITRON CORPORATION STATEMENT OF OPERATING COSTS FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Statement 9

Statement 9
Item			Amount
Beginning inventory		$	2,596,446
Add: Net purchases for the year			21,378,823
Processing fees			10,764
Less: Ending inventory	(		4,521,984)
Obsolete and slow-moving inventory sold	(		41,703)
Transferred to operating expenses	(		5,587)
Cost of goods sold			19,416,759
Loss on decline in market value			62,966
		$	19,479,725

~241~

ZENITRON CORPORATION STATEMENT OF OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Statement 10

Statement 10
Item Wages and salaries Export (customs) expense Depreciation expense Other expenses	Selling 251,859 $ 47,457 2,319 120,350 421,985 $	Administrative 102,839 $ - 12,063 89,272 204,174 $	Total 354,698 $ 47,457 14,382 209,622 626,159 $	Note
				Balance of each account has not exceeded 5% of total account balance

~242~

(VI) If the Company and Its Affiliates Encounter Any Financial Difficulties in the Past Year and as of the Date of Publication of the Annual Report, the Impact on the Company’s Financial Status Shall Be Listed � None.

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VII. Review of Financial Conditions, Financial Performance, and Risk Management

(I) Financial status (consolidated)-Adopt International Financial Reporting Standards:

Unit: NT$1,000

Year Item	2020	2019	Difference	Difference	Difference
			Amount	%	Expl anati on
Current assets	18,490,142	13,493,379	4,996,763	37.03	1
Non-current assets	800,035	733,721	66,314	9.04
Total assets	19,290,177	14,227,100	5,063,077	35.59	1
Current liabilities	14,243,165	9,633,359	4,609,806	47.85	2
Non-current liabilities	245,454	188,033	57,421	30.54	3
Total liabilities	14,488,619	9,821,392	4,667,227	47.52	2
Capital stock	2,138,249	2,138,249	0	-
Capital surplus	958,734	965,034	(6,300)	(0.65)
Retained earnings	1,361,862	1,085,221	276,641	25.49	4
Other interests	342,713	217,204	125,509	57.78	5
Non-controlling interests	-	-	0	-
Total shareholders’ equity	4,801,558	4,405,708	395,850	8.98
Explanation: Analysis of the change in the percentage of increase or decrease in the last two years (those with an increase or decrease of less than 20% are exempt from analysis) 1. Current assets are due to the increase in accounts receivable as a result of the growth in results for the period and the increase in inventories as a result of stocking up on demand from related customers. 2. Current liabilities are due to the increase in short-term loans and payables as a result of the increase in imports during the period. 3. Non-current liabilities are due to the increase in lease liabilities - non-current. 4. The retained earnings are due to the increase in net income for the period. 5. Other equity is due to the effect of valuation gain on financial assets at fair value through other comprehensive income.

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(II) Financial performance: Adopt International Financial Reporting Standards:

Unit:NT$1,000

Year Item	2020	2019	Increase (decrease) Amount	Changes ratio (%)	Chan ge Anal ysis Expl anati on
Operatingrevenues	34,401,169	26,992,869	7,408,300	27.45	1
Operatingcosts	(32,779,983)	(25,509,080)	(7,270,903)	28.50	1
Grossprofit	1,621,186	1,483,789	137,397	9.26
Operatingexpenses	(1,194,209)	(1,098,220)	(95,989)	8.74
Operating profit	426,977	385,569	41,408	10.74
Non-operating income and expenses
Other income	80,725	81,765	(1,040)	(1.27)
Othergains and losses	169,516	33,320	136,196	408.75	2
Financial costs	(122,162)	(193,227)	71,065	(36.78)	3
Net income before income tax	555,056	307,427	247,629	80.55	1
Total income tax expense	(83,031)	(76,846)	(6,185)	8.05
Net income	472,025	230,581	241,444	104.71	1
Explanation: Analysis of the change in the percentage of increase or decrease in the last two years (those with an increase or decrease of less than 20% are exempt from analysis) 1.Operating revenues, operating costs, net income before tax and net income for the year increased compared to the previous period due to the growth of our major customers. 2.The net exchange gain for the period was higher than the previous period due to the effect of exchange rates; the gain on disposal of financial assets at fair value through profit or loss was higher than the previous period. 3.Finance costs decreased during the period due to lower interest rates on borrowings.

(II) The expected sales volume and its basis, the possible impact on the Company’s future financial operations and the plan to respond:

The Company's main products are various electronic parts and components. Due to the wide variety of products and the significant difference in unit price of each product, it is not appropriate to use sales volume as the basis for measurement. On the business side, the Company will provide higher value-added services to its customers, increase its distribution of new product lines, increase its sales and customer penetration in Mainland China, and leverage its own strengths and information to increase its market share and create maximum value for the Company and its shareholders.

������

III. Cash flow

Analysis on cash flow

		Analysis on cash flow	Analysis on cash flow	Analysis on cash flow	Analysis on cash flow
						Unit: NT$1,000
Beginning cash balance (1)	Net cash flow from operating activities throughout the year (2)	Net cash flow from investment and financing activities throughout the year (3)	Exchang e differenc es (4)		Cash surplus (deficiency) amount (1)+(2)+(3)+(4)	Remedial measures for estimated cash deficit
						Investment plans		Financial plans
1,198,560	(2,440,090)	2,997,197	(79,444)		1,676,223	-		-
1.The change in cash flow for the year increased by $477,663 thousand from the beginning of the period, as follows Item Increase (decrease) in net cash flow (1) Operating activities: Net cash outflow from operating activities $ (2,440,090) thousand (2)Investing activities: Net cash inflow from investing activities of $47,431 thousand (3) Financing activities: Net cash inflow from financing activities of $2,949,766 thousand (4) Effect of exchange rate($79,444)thousand NT$477,663 thousand 2. Analysis on the remedial measures for estimated cash deficit and liquidity: Not applicable. 3.Cash flow analysis for the coming year:
Beginning cash balance (1)	Net cash flow from operating activities throughout the year (2)	Net cash flow from investment and financing activities throughout the year (3)		Cash surplus (deficiency) amount (1)+(2)+(3)		Remedial measures for estimated cash deficit
						Investmen t plans	Financial plans
1,676,223	30,228	(315,432)		1,391,019		-	-
Analysis on cash flow situation for the coming year: (1) Operating activities: The net cash outflow from operating activities was mainly due to the increase in notes and accounts receivable in 2020. (2) Financing activities: The net cash inflow was mainly due to the increase in short-term borrowings. Analysis on the remedial measures for estimated cash deficit: Not applicable.

IV. The impact of major capital expenditure in the last year on the financial business:

Review and analysis of significant capital expenditures and their funding sources: None

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V. Re-investment policy, major reason for profit/loss of the last year, improvement plan and the investment plan for the coming year:

Explanation	Carrying amount	Policy	Investment profit or loss	Major reason for profit or loss	Improvem ent plan	Other investment plans in the future
RAYTRONIC CORPORATION	30,475	Long-term equity i n v e s t m e n t	2, 321	Valuation Gain on the financial assets at fair value through profit or loss and profitable business expansion	Not applicable	Adjustment for subsidiary development
Cordial Investment Corporation	57, 676	Long-term equity i n v e s t m e n t	47,832	Dispoal of profit oon the financial assets at fair value through profit or loss	Not applicable	Adjustment for subsidiary development
SUPERTRONIC INTERNATIONAL CORP.	2,414,819	Long-term equity i n v e s t m e n t	301,241	Profit from transfer of investment in ZENITRON (H.K) LIMITED	Not applicable	Moderate adjustment to operating scale expansion
Zenicom (HK) Limited	87,490	Long-term equity investment through SUPERTRONIC INTERNATIONAL CORP.	348	Ceaseless business expansion	Not applicable	Adjustment for subsidiary development
Zenitron (HK) Limited	2,266,439	Long-term equity i n v e s t m e n t	302, 614	Profit for the period from continued business expansion	Not applicable	Adjustment for subsidiary development
Zenitron (Shanghai) International Trading Co., Ltd.	181,056	Long-term equity investment through Zenitron (HK) Limited	16,589	Profit for the period from continued business expansion	Not applicable	Adjustment for subsidiary development
ZTHC (Shanghai) Co., Ltd.	326,338	Long-term equity investment through Zenitron (HK) Limited	48, 087	Profit for the period from continued business expansion	Not applicable	Adjustment for subsidiary development
Zenitron (Shenzhen) Technology Co., Ltd.	68,438	Long-term equity investment through Zenitron (HK) Limited	14, 044	Continued Business Expansion	Not applicable	Adjustment for subsidiary development
Shanghai Zenitron Electronic Trading Co., Ltd.	89,599	Long-term equity investment through Zenitron (HK) Limited	524	Continued Business Expansion	Not applicable	Adjustment for subsidiary development

(VI) Analysis and Assessment on Risk Matters:

• (1) Effects of Changes in Interest Rates, Foreign Exchange Rates and Inflation on Corporate Finance, and Future Response Measures:

• The Company's bank borrowings are mainly due to the capital requirements arising from operating cycles. An increase in market interest rates will have an adverse effect on the Company's profit and loss. The Company will evaluate the trend of interest rates from time to time and reduce the impact of interest expenses on the Company through financing instruments and working capital management.

• Most of our sales and purchase orders are quoted on a U.S. dollar basis, which has a significant hedging effect and does not cause significant operational disruptions due to exchange rate issues.

• The Company has a dedicated risk control unit to observe and analyze the changes and

������

• trends of exchange rates on a long-term basis, and to ensure appropriate hedging of changes in the Company's foreign currency positions.

• Inflation in recent years is still within the expected range, and the Company's product market price changes are more flexible, so it is not yet affected by this factor too much.

������

• (2) Policies, Main Causes of Gain or Loss and Future Response Measures with Respect to Highrisk, High-leveraged Investments, Lending or Endorsement Guarantees, and Derivatives Transactions:

• The Company adopts a conservative financial policy and does not engage in high-risk

• investments, except for hedging exchange rate operations and conservative fixed-income investments. Ltd.

• (3) Future Research & Development Projects and Corresponding Budget: The company is a professional technology integrated marketing channel, so it is not applicable. Our main core business is the electronic marketing channel business, providing

• technical support for customers' inventory, marketing and total solutions, etc. We have a number of FAE staff to provide original technical services, consultation and total solutions for different customers, and we have a good grasp of the support and progress of such cases. In the future, we expect to continue to invest and expand our technical services to our customers, and to move towards the technical level of product integration, so that we can enhance our professional technology and become a professional technical integration marketing channel provider.

• (4) Effects and Response to Changes in Domestic and Foreign Policies and Regulations Relating to Corporate Finance and Sales: None.

• (5) Effects of and Response to Changes in Technology and the Industry Relating to Corporate Finance and Sales :

• With the advancement of information product application technology, consumers'

• willingness to replace their products is accelerated, and the Company's agent lines are all international manufacturers, which have considerable influence on the development and leadership of technical products. In short, technological changes and enhancements have had a positive impact on the Company's operations and competitiveness. In addition, in response to the impact and challenges of such technology, the Company continues to seek out advanced technology partnerships to support its future growth.

• (6) The Impact of Changes in Corporate Image on Corporate Risk Management, and the Company’s Response Measures: None.

• (7) Expected Benefits from, Risks Relating to and Response to Merger and Acquisition Plans: None.

• (8) Expected Benefits from, Risks Relating to and Response to Factory Expansion Plans: Not applicable.

• (9) Risks Relating to and Response to Excessive Concentration of Purchasing Sources and Excessive Customer Concentration: None.

• (10) Effects of, Risks Relating to and Response to Large Share Transfers or Changes in Shareholdings by Directors, Supervisors, or Shareholders with Shareholdings of over 10%: None.

• (11) Effects of, Risks Relating to and Response to the Changes in Management Rights: None.

• (12) For the contentious or non-contentious events, it shall list the directors, general manager, substantial person in charge, and shareholders with more than 10% shareholding, as well as the major contentious and non continuous events or administrative litigation event related to the affiliates currently or in the past according to the judgment. For those that the result might show substantial influence on the shareholder’s equity or price of securities, it shall disclose its fact, target amount, start date of litigation, major involved parties and handling situation until the date of using the annual report: None.

• (13) Information Security Protection and Countermeasures

Our company attaches great importance to information security, and the Information Technology Division is responsible for establishing a strict information security process mechanism, including information security testing, crisis management, and improvement of information security quality, etc. In addition to the complete network and computer

������

security protection that has been established, we have also set up a complete audit and education training for employees' computer operation behavior and conducted information security drills. The company also continues to enhance information security equipment to strengthen the defense ability of external attacks.

For the most recent year and as of the date of the annual report, the Company had no material information security incidents affecting its operations.

(14) Other major risks and countermeasures: None

VI. Other important matters: None.

������

VIII. Special Disclosure

(I) Summary of Affiliated Companies

• (1) Consolidated Business Reports of Affiliated Companies:

• Overview of Affiliated Companies:

==> picture [714 x 405] intentionally omitted <==

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

ZENITRON CORPORATION
100%
1.47% 100% 100%
SUPERTRONIC
INTERNATIONAL CORP.
98.53%
Cordial
RAYTRONIC Investment
100%
CORPORATION Corporation
Zenicom (HK)
Zenitron (HK) Limited
Limited
100% 100% 100% 100%
Zenitron Zenitron ZTHC Shanghai
(Shanghai) (Shenzhen) (Shanghai) Zenitron
International Technology Co., Ltd. Electronic
Trading Co., Co., Ltd. Trading Co.,
Ltd. Ltd.
----- End of picture text -----

������

2. Profile of each Affiliated Companies:

Name of the Company	Date of Incorporation	Address	Paid-in Capital	Major Business Items
RAYTRONIC CORPORATION	Dec. 21, 1988	4F,No. 8, Lane 250, Xinhu 2nd Road, Neihu District, Taipei, Taiwan	$15,200,000	Trading of electronic parts and components
Cordial Investment Corporation	Jan. 09, 2003	3F, No. 2, Lane 47, Ming Yuan St., Sanchong District, New TaipeiCity	$77,000,000	Holding company for transfer of investment
SUPERTRONIC INTERNATIONAL CORP.	Sep. 01, 2001	AKARA BUILDING 24 DE CASTRO STREET,WICKHAMS CAY I. ROAD TOWN, TORTOLA, BRITISH VIRGIN ISLANDS	USD18,703,758.59 (Note 1) The exchange rate at the reporting date was approximately 28.48	Holding company for transfer of investment
Zenicom (HK) Limited	Jul. 06, 2017	Room.6C Goldlion Holdings Centre,13-15 Yuen Shun Circuit,Siu Lek Yuen,Shatin Hong Kong	USD3,049,991.67 (Note 1) The exchange rate at the reporting date was approximately 28.48	Trading of electronic parts and components
Zenitron (HK) Limited	Jun. 16, 1998	2B, Goldilocks Group Centre, 13-15 Yuen Yuen Shun Wai, Siu Lek Yuen, Shatin, Hong Kong	HK34,782,648 (Note 1) The exchange rate at the reporting date was approximately3.67	Trading of electronic parts and components
Zenitron (Shanghai) International Trading Co., Ltd.	Sep. 12, 2002		USD5,000,000 (Note 1) The exchange rate at the reporting date was approximately28.48	Trading of electronic parts and components
		Room 907B, No.55 Cili Road,
		Shanghai Free Trade Pilot Zone
ZTHC (Shanghai) Co., Ltd.	Jul. 09, 2003		USD3,550,000 (Note 1) The exchange rate at the reporting date was approximately 28.48	Sales of computer memory devices, technical support and sales of related parts
		Room 2517, No.28 Ga Feng
		Road, Shanghai Free Trade Pilot
		Zone
Zenitron (Shenzhen) Technology Co., Ltd.	Jun. 22, 2006	10A, 10F, 9A2, Shenzhen Bay Technology Eco Park, Baishi Road, Yuehai Street, Nanshan District, Shenzhen	USD3,000,000 (Note 1) The exchange rate at the reporting date was approximately 28.48	Trading of electronic parts and components
Shanghai Zenitron Electronic Trading Co., Ltd.	Aug. 9, 2010	Room 401, 4F, No.39 Building, No.333 Qinjiang Road, Caohejing Development Zone, Xuhui District, Shanghai	USD3,000,000 (Note 1) The exchange rate at the reporting date was approximately 28.48	Trading of electronic parts and components

Note 1: If the affiliated company is a foreign company, the name and address of the company may be expressed in English, the date of establishment may be expressed in A.D. date, and the amount of paid-in capital may be expressed in foreign currency (provided that the exchange rate as of the date of filing is added).

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3. Information on the Directors, Supervisors and General Managers of each Affiliated Companies:

Unit:

Companies:	Companies:		Unit:	Unit:
shares
Name of the Company	Title(Note 1)	Name or representative	Shareholdings (Note 2) (Note 3)
			Number of shares	Shareholding ratio
RAYTRONIC CORPORATION	Directors Directors Directors Supervisor	ZENITRON CORPORATION Representative: CHOU,YEOU-YIH ZENITRON CORPORATION Representative: CHOU,CHUN-HSIEN ZENITRON CORPORATION Representative: CHOU,CHUN-KUANG ZENITRON CORPORATION Representative: YEH,LU-CHANG	1,520,000	100%
Cordial Investment Corporation	Directors Directors	ZENITRON CORPORATION Representative: CHOU,CHUN-HSIEN ZENITRON CORPORATION Representative: CHOU,YEOU-YIH	7,700,000	100%
SUPERTRONIC INTERNATIONAL CORP.	Directors	ZENITRON CORPORATION Representative: CHOU,YEOU-YIH	18,703,759	100%
Zenicom (HK) Limited	Directors Directors Directors	SUPERTRONIC INTERNATIONAL CORP. Representative: CHOU,CHUN-HSIEN SUPERTRONIC INTERNATIONAL CORP. Representative: CHOU,CHUN-KUANG SUPERTRONIC INTERNATIONAL CORP. Representative: YEH,LU-CHANG	23,800,000	100%
Zenitron (HK) Limited	Directors Directors Directors	ZENITRON CORPORATION Representative: CHOU,YEOU-YIH ZENITRON CORPORATION Representative: CHOU,CHUN-KUANG ZENITRON CORPORATION Representative: CHEN,HSIN-YI	510,000	1.47.%
Zenitron (Shanghai) International Trading Co., Ltd.	Directors Supervisor	Zenitron (HK) Limited Representative: CHOU,LI-MEI-CHEN Zenitron (HK) Limited Representative: YEH,LU-CHANG	(Note 4)	100%
ZTHC (Shanghai) Co., Ltd.	Directors Supervisor	Zenitron (HK) Limited Representative: YEH,LU-CHANG Zenitron (HK) Limited Representative: CHEN,HSIN-YI	(Note 4)	100%
Zenitron (Shenzhen) Technology Co., Ltd.	Directors	Zenitron (HK) Limited Representative: CHEN,HSIN-YI	(Note 4)	100%
Shanghai Zenitron Electronic Trading Co., Ltd.	Directors Supervisor	Zenitron (HK) Limited Representative: CHEN,HSIN-YI Zenitron (HK) Limited Representative: CHOU,LI-MEI-CHEN	(Note 4)	100%

Note 1: If the affiliated company is a foreign company, the position is listed as equivalent.

Note 2: If the investee company is a limited company, please enter the number of shares and the percentage of shareholding; for others, please enter the amount of capital and the percentage of capital contribution and specify.

Note 3: If the director and supervisor is a legal entity, the relevant information of the representative should be disclosed. Note 4: None of shares held by limited company.

4.For those who are presumed to be in a controlling or subordinate relationship pursuant to Article 369-3 of the Company Act, information on their shareholders: None.

5.The overall industry and division of labor of the affiliated companies.

(1) The business of the overall affiliated company consists mainly of the distribution of electronic parts and components and investment holding.

• (2) The division of labor among the affiliates is described as follows.

• a. RAYTRONIC CORPORATION is mainly engaged in the trading of electronic parts and components, and also engages in some investments.

• b. Cordial Investment Corporation is mainly engaged in the business of investment.

• c. SUPERTRONIC is the holding company of the Viking Islands.

• d. Zenicom (HK) Limited is mainly engaged in the trading of electronic parts and

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components.

• e. Zenitron (HK) Limited is mainly engaged in the sale and purchase of electronic parts and components in Hong Kong and China respectively.

• f. ZTHC (Shanghai) Co., Ltd. is mainly engaged in the sales of computer memory devices, technical support and sales of related parts for domestic sales in China.

• G. Zenitron (Shenzhen) Technology Co., Ltd., Zenitron (Shanghai) International Trading Co., Ltd. And Shanghai Zenitron Electronic Trading Co., Ltd. are mainly engaged in the business of selling and distributing electronic parts and components to enterprises in China.

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6. Overview on Operations Profile of Affiliated Companies:

						Dec. 31,2020 Unit: NT$1,000	Dec. 31,2020 Unit: NT$1,000	Dec. 31,2020 Unit: NT$1,000
							Net	Net earnings
							income	per share
						Operating	Profit or	(after-tax)
			Total		Operating	profit	loss
Name of the Company	Capital	Total assets	liabilities	Net value	revenues	(loss)	(after-tax)
RAYTRONIC
	15,200	30,689	214	30,475	14,754	1,082	2,321	-
CORPORATION
Cordial Investment
	77,000	57,688	12	57,676	-	(88)	47,832	-
Corporation
SUPERTRONIC
	532,683	2,414,819	-	2,414,819	-	(85)	301,241	-
INTERNATIONAL CORP
Zenicom (HK) Limited	86,864	95,947	8,457	87,490	72,604	78	348	-
Zenitron (HK) Limited	127,652	7,150,327	4,883,888	2,266,439	19,068,056	288,486	302,614	-
Zenitron (Shanghai)
International Trading Co.,	142,400	754,962	573,906	181,056	1,383,299	25,990	16,589	-
Ltd.
ZTHC (Shanghai) Co.,Ltd.	101,104	791,463	465,125	326,338	2,314,073	62,892	48,087	-
Zenitron (Shenzhen)
	85,440	502,889	434,451	68,438	1,010,715	23,275	14,044	-
TechnologyCo.,Ltd.
Shanghai Zenitron
Electronic Trading Co.,	85,440	90,698	1,099	89,599	5,773	510	524	-
Ltd.

Note 1: If the affiliated company is a foreign company, the name and address of the company may be expressed in English, the date of establishment may be expressed in Western dollars, and the amount of paid-in capital may be expressed in foreign currency (provided that the exchange rate as of the date of filing is added).

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(2) Statement for the consolidated financial statements of affiliated enterprises

ZENITRON CORPORATION

Statement for the consolidated financial statements of affiliated enterprises

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

Very truly yours,

Name of the Company: ZENITRON CORPORATION

Responsible Person: CHOU,YEOU-YIH

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• (3) Affiliation Reports: Not applicable

(II) Private Placement Securities during the most recent fiscal year as well as the current fiscal year up to the date of publication of the annual report: None.

(III) Holding or Disposal of the Company’s Shares by Affiliated Companies during the most recent fiscal year as well as the current fiscal year up to the date of publication of the annual report: None.

(IV) Other Necessary Supplementary Notes: None.

• IX. In the event of any matter which has had a significant impact on shareholders rights or the price for the securities referred to Article 36, paragraph 2, subparagraph 2 of the Securities and Exchange Act during the most recent fiscal year as well as the current fiscal year up to the date of publication of the annual report: None.

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